HARDWOOD RECORD 



17 



doing his sliare in all things helpful to build and maintain profitable 

 manufacturing and merchandising conditions in our portion of the lum- 

 ber industry, and as an association to co-operate with other associations 

 for the betterment of the industry as a whole. 



Report of Railroad Committee 



George H. Chapman, eliairman of tlie railroad committee, said that 

 the only tiling of moment that commanded the attention of the com- 

 mittee during the past year was the proposal to advance rates on fuel, 

 and that a hearing on this subject would come up in March, at which 

 hearing the association would have representation. 



In talking further along traffic matters, President Goodman intro- 

 duced F. M. Elkington of the American Freight Traffic Bureau of 

 Milwaukee, who told of the work done by tliat bureau, and expressed 

 himself as believing that co-operation between it and the association 

 would be for the benefit of the latter. He outlined three plans by 

 which the organization could get together as follows: 



First: Handle all matters regarding rate information on a direct 

 arrangement. 



Second: To act in an advisory capacity, charging only for actual 

 work done. 



Third: To collect over-charges in freight rates. 



Inter-Insurance Exchange Endorsed 



Charles F. Simonson, general manager of the National Lumber 

 Manufacturers' Inter-Insurance Exchange, talked interestingly regard- 

 ing the work of that organization. Mr. Simonson gave the same talk 

 before the Michigan Hardwood Manufacturers' Association meeting 

 at Detroit two days later, and a more detailed account will be found 

 in connection with the report of that meeting on page 2S. 



After complimentary reference to the plans of the Inter-Insurance 

 Exchange, on motion of A. L. Osborn, the association formally ap- 

 proved of this work and suggested members getting lined up on these 

 contracts as quickly as possible. 



Cost of Compensation Insurance 



A paper was then read by Chas. H. Crownliart, Madison, Wis., in which 

 the working of the insurance and compensation laws of that state 

 was explained in detail. Mr. Crownhart included in his paper a dis- 

 cussion of the various methods of insurance, for the purpose of com- 

 pensating injured employes in Wisconsin. The industrial commission 

 of the state looks carefully after this work, assists in carrying out the 

 laws, and collects statistics on which to base rates of insurance. It 

 does this at a yearly cost of slightly over $21,000. Last year the 

 commission made 453 awards, and adjusted more than 11,000 cases 

 of compensation. The sum paid to the injured men was $1,080,- 

 687.22. In speaking of the plan of the work Mr. Crownhart said: 



Under the Wisconsin compensation act and the insurance laws of the 

 state, employers are required to insure their compensation risks with 

 companies permitted to do business within the state, or in lieu thereof, 

 secure an exemption from the industrial commission upon a satisfactory 

 financial showing of ability to carry their own risli. Where the employer 

 carries his own risk, unless he lays by a portion of his earnings to take 

 care of his payments under compensation, he cannot be said to be 

 carrying insurance. He is simply taking his chance. 



The purpose of insurance from the employers' standpoint, is to spread 

 the risk so as not to cause a shock, or perliaps insolvency, to the busi- 

 ness. From the compensation standpoint insurance assures the injured 

 employe payment of his compensation. Because of the law of hazard, 

 no one can safely say that his risk will be evenly spread over a term 

 of months or a term of years unless he carries insurance. 



About 500 employers in Wisconsin are carrying their own risk under 

 compensation. From a financial point of view employers have met with 

 success and up to date there has been no loss to injured employes. 

 The Unknown Fl'ture 



The trouble with allowing employers to carry their risk, so far as the 

 industrial commission is concerned, is that the commission has not 

 sufficient means to determine whether or not a going concern may be 

 solvent at any given date in the future. Under compensation, payments 

 sometimes extend over long periods of time and in the ease of widows, 

 frequently compensation extends from six to nine years. What assur- 

 ance has the commission that any concern, no matter how solvent, may 

 not become insolvent before the expiration of that period of time? 



The commission believes in employers carrying their risk in proper 

 cases, but in order that the workmen and their dependents who are 

 forced to become creditors over an extended period of time, may not 

 lose their vested rights, we think some provision should be made 

 whereby employers carrying their own risk should deposit, within a 

 short time after the determination of the amount due the injured work- 

 man under compensation, the present worth of the deferred payments. 



with the state or some supervised trust fund, to be there disbursed 

 according to the award. 



From a report of June 30, 1914, it was seen that employers carrying 

 their own risk did so at an average cost of ,"i,'; cents on ?100 of payroll, 

 while insured risks of the same classifications averaged ?3.32. 

 Cake Saves Monev 



Employers carrying their own risk exercise greater care to prevent 

 accidents. Wlien accidents happen, they exercise better Judgment in 

 handling the cases. The injured man is looked after more closely and 

 a greater effort is made to get him back Into employment. If the work- 

 man cannot take his old job he may he able, pending recovery, to take 

 a lighter job where he can earn a wage. This is good for the Injured 

 man and good for the employer. Frequently the man makes quicker 

 and better recovery in such ca.ses. Many a joint becomes permanently 

 stiffened because of lack of use. Men laid off for considerable periods 

 often worry over their condition until nervous disorders are set op 

 which become serious. The digestion Is upset, the muscles lose tone, 

 the patient becomes neurasthenic, and really feels as badly as be thinks 

 he does, all from lack of proper interest taken in the man's welfare. 

 Under insurance often the proper relation does not exist between em- 

 ployer and employe, because the employe is turned over to the Insurance 

 adjuster, between whom there is a lack of cordiality. These arc some 

 of the reasons for lower cost to employers carrying their own risk than 

 where the insurance company carries the risk. 



Notwithstanding the lower cost, an employer should not attempt to 

 carry his risk unless he is prepared to pay at least one death loss 

 witliout undue shock to business. There are 12,000 accidents a year 

 in Wisconsin, each causing a loss of over seven da.vs' wages, besides 

 medical care. 



After a brief recess there was a discussion on compensation insur- 

 ance which was inaugurated by a short talk by W. C. Landon of 

 Wausau. He commented particularly on safe-guarding all dangerous 

 operations, thus saving much in compensation, and said that nothing 

 can be done in liability insurance to keep rates low which will have bo 

 beneficial a result as co-operation in prevention of accidents, and that 

 sixty per cent of all accidents are due to carelessness, which is directly 

 reducible by educational work. 



Referring to the rate comparisons as outlined in Mr. Crownhart 'a 

 paper, Mr. Landon said that the rates of the stock companies have 

 been reduced forty per cent in the last three years directly as th» 

 result of competition by the mutual companies, and that the reason 

 for the lower cost of this type of insurance is that all revenues go 

 directly back to the interested people. 



W. A. Holt asked Mr. Crownhart three questions, namely, regarding 

 the rates on sawmills only; comparison of compensation in Michigan 

 and Wisconsin, and also asked regarding Mr. Crownhart 'g statement 

 that rates are no higher than five years ago, stating that his rate 

 has gone up from five to ten times what it was at that time. 



Regarding comparison of Michigan and Wisconsin rates, Mr. 

 Crownhart answered that Wisconsin compensation insurance cost is 

 sixty-eight per cent, and that the rate shouhl be;ir the same propor- 

 tion as in Michigan, which gives only fifty per cent of w;iges with an 

 insurance cost of fifty per cent. 



After discussion on newspaper reports as to the attitude of lum- 

 bermen regarding the Wisconsin compensation law, which in the 

 main were derogatory, it was found that the consensus of the mem- 

 bers present is very strongly in favor of the law. In fact it was 

 definitely stated that an actual canvass by mail of all the associa- 

 tion members resulted in an absolutely unanimous favorable com- 

 ment on a proper workingmen 's compensation act. It was stated 

 that all the member were pleased with the act in spite of the in- 

 creased {)remiums, it being especially jdeasing that the employers 

 are brought more closely in touch with the employes through the 

 workings of this act. 



Mr. Crownhart then spoke further regarding the general workings 

 of the ideal compensation act. He sai<l that inevitably there would 

 be a much broader distribution of all compensation on the popula- 

 tion as a whole and he instanced laws in effect in Germany as ap- 

 proaching the ideal. 



The meeting adjourned for luncheon. 



AFTERNOON'S SESSION— TUESDAY 



The first question to come up in the afternoon session was a paper 

 by R. G. Dahlberg of St. Paul on traffic service. Emphasis was 

 laid on three points which ought to be considered in working out 

 transportation rates more equitably for lumbermen. There should be 

 different rates for different grades and values of lumber, so that the 



