collection; 49 cases against railroad companies, involving difficult and undetermined questions of the law of interstate commerce referred for opinion; and, 207 miscellaneous claims for compensation, referred for opinion.

The chief counsel was present at every term of the Court of Appeals and Appellate Division. In fully three-fourths of all cases that went up to these two courts he prepared either original briefs at the request of the court or briefs supplemental to those filed by the attorney general of the state. He also reviewed all cases on appeal and all findings before they were signed by the commissioners. His close application and vigorous conduct of cases went far to support the acts of the Commission when reviewed by the courts.

This division expended much time in establishing forms; and the practice on appeal as formulated not only has been adopted by the appellants in every case, but also has met the approval of the attorney general and of the Appellate Division, Third Depart

ment.

Mr. Grimes assists the chief counsel in the character of work just described.

Mr. Ward has taken care of collections against non-insurers. It has been necessary to commence many civil actions for collections in the Municipal Court of New York City, and in the Supreme Court. As a basis for fixing the amount of the penalty, an examination of the defendant before trial as to the number of employees and the amount of payroll has been necessary.

Mr. Connor resigned as chief counsel in the month of December and terminated his connection with the Bureau on the last day of the year. His successor is Mr. Robert W. Bonynge, who becomes not only the chief counsel of the Bureau but chief counsel as well for the State Industrial Commission.

ACTUARIAL DIVISION

This division is in charge of Mr. Joseph H. Woodward. The present duties of the actuary so far as they relate to the general work of the Bureau are limited to computing present values of awards made and payable in instalments. Aside from this his work is exclusively with the state fund where his analysis of claims and state fund experience is a guide to dividends and rate

making. The state fund report will reflect the activities of this division during the year.

STATE FUND DIVISION

This division is in charge of Mr. F. Spencer Baldwin, Manager, with Mr. Nicholas W. Muller as Assistant Manager. The manager's report which is submitted herewith and made a part of this report amply and adequately covers the field of activities of the state insurance fund.

INFORMATION

The Bureau still finds it expedient, even necessary, to continue its information division. At first this division was visited daily by two hundred or three hundred people who came to inquire about the law and their rights under it and also about pending claims. But, as claims came to be more rapidly disposed of and the Bureau caught up with its calendar, the work of the division was greatly lessened. Then came the amendment to the law which effected a radical change and again was the division overrun with inquiries. Likewise, as the amended law became better understood, fewer inquiries were made in person. It may be said the normal condition has been reached which requires the constant services of three employees. The scope of this division could be somewhat broadened to advantage if the Commission should care to undertake to a greater degree to assist claimants in doing the routine work necessary in perfecting claims. Forms are prepared with the thought in mind to guide anyone not familiar with the method; and yet there is much awkwardness that causes some unavoidable delays.

"THE BULLETIN "

The Bureau has reaped its share of advantages from the publication of "The Bulletin," the Commission's official monthly periodical, and no issue has appeared without an article by the deputy commissioner in charge and articles also from the state fund and legal divisions. This practical and most useful means of disseminating information works a distinct advantage in the administration of the law which is a new and long statute embracing legislation in a new field. It is therefore apparent that many delays and irregularities are attributable solely to ignorance of the law. It is a fine means also for the promulgation of infor

mation about the state insurance fund which is constantly conscious of the handicap of being forbidden to solicit business when its competitors are most active and none too careful in their representations concerning the fund.

CIVIL SERVICE

From the standpoint of the civil service the Bureau is beyond criticism. All grade employees are permanent civil service appointees with the exception of the provisional assistant examiners of claims and these have taken an examination. The Bureau is awaiting the promulgation of eligible lists under this title. It may be said, then, that temporary employees are selected from proper lists; that advancement is made on promotional examinations; and that permanent employees are regularly selected. Within the year the Bureau has co-operated to the fullest extent with the Senate Civil Service Committee appointed to make a report looking to the standardization of employments and salaries, and looks forward without fear to the publication of the report.

STATISTICAL

The Workmen's Compensation Commission had planned for a statistical analysis of claims but the actual work had not been begun. When the Industrial Commission Law became effective and the new Commission perfected its organization it took over the Bureau of Statistics and Information which for many years had been in existence in the Department of Labor. That Bureau at once commenced work along lines formulated after two or three national conferences of statisticians and actuaries connected with compensation bureaus of the various states. The Bureau has been fortunate in thus being able from the beginning to make its statistical analysis along lines of permanent adoption, which in itself gives added value to the results. In that part of this report under the heading Claims Division will be found tables comprising an analysis of the cost of compensation insurance in this state for the period from the time the law became effective, July 1, 1914, to April 1, 1915, when the amended law became effective. This period of nine months forms a natural division and the careful analysis as made will be the basis of a comparison with the effect of the amended law.

WILLIAM C. ARCHER, Second Deputy Commissioner.

(2) REPORT OF THE STATE INSURANCE FUND

(A) REPORT OF THE MANAGER

To the Industrial Commission:

Growth of the Fund

The State Insurance Fund secured a substantial increase of business during the year ending December 31, 1915. The number of policy holders increased from 7,119 to 8,507. Notwithstanding the increase in the number of policyholders, the volume of premiums in force was slightly smaller on December 31, 1915, than at the close of the preceding year, the respective amounts being $674,973.64 and $692,583.64. This decline was apparent and not real, being due to two facts: first, that the volume of premiums on December 31, 1914, was based on the higher rates in force for the first policy period, which ended on that date, and second, that the merit reductions from the manual rates granted in recognition of safety conditions as determined by inspections had not yet been applied. The volume of premiums as of December 31, 1915, is based on the reduced rates which went into effect at the first of the year, these rates being further reduced through merit re-rating. The lower rates and the merit reductions together decrease the amount of premiums in force by over 20 per cent.

It is noteworthy that the Fund has held practically all the business that it has obtained from the beginning, notwithstanding the fact that it has had to meet the competition of nearly fifty stock and mutual companies writing compensation insurance. The total loss of business through cancellations has been very small, and most of the withdrawals have been due to discontinuance of business on the part of policyholders. The total amount of semi-annual premiums represented by withdrawals of employers transferring their insurance to stock or mutual companies is roundly $12,000. As an offset to this slight loss, the Fund has secured approximately $250,000 of semi-annual premiums through new business during the eighteen months of operation, from July 1, 1914, to December 31, 1915. The success of the Fund in holding old business and getting new business is most gratifying, in the face of the efforts made by both stock and mutual companies

to entice employers away from the Fund and the constant attacks to which it has been subjected from this quarter.

The financial statement for the year, which is appended to this report, shows a sound condition in all respects. The net premium income for the year was $1,293,613.15. The total losses paid during the year amounted to $296,013.83. The amount of loss reserves on December 31, 1915, was $906,848, and the catastrophe surplus $145,729.33. The total surplus to policyholders earned during the year was $400,314.22, and the dividends paid during the year totaled $347,541.45. The investments on December 31, 1915, amounted to $1,059,824.91, and the cash on deposit to $207,841.04.

The Fund has earned a total surplus to policyholders of $579,211.57 since it began business July 1, 1914. This amount has been earned after the payment of losses to the amount of nearly $300,000, and after setting aside reserve and surplus funds of more than $1,000,000..

The loss ratio for the eighteen months ending December 31, 1915, was 64.8 per cent. It should be noted that this ratio would have been considerably lower if the State Fund had charged the same rates as the casualty companies; on the basis of the larger premium income which the higher rates would have yielded, the loss ratio would have been approximately 56 per cent. The expense ratio for the eighteen months was 14.3. The management expenses were paid by the state under the provision of the law guaranteeing such payment until January 1, 1917, but if the Fund had paid its own expenses, the portion of the earned premiums used for this purpose would have amounted to 14.3 per cent. The expense ratio, like the loss ratio, would have been somewhat lower if the Fund had charged the higher rates of the casualty companies, amounting in that case to roundly 13 per

cent.

A summary of general facts concerning the condition of the Fund and a detailed statement of assets and liabilities, and of income and disbursements are appended to this report.