Mai ell 25, 1917 



K. BABCOCK, PITTSBURGH. PA„ 

 TRUSTEE 



hugh mclean, buffalo, n. y., 

 :hairman inspection committee 



C. A 



GOODMAN, MARINETTE. WIS., 

 TRUSTEE 



when studied in relation to cause and effect, frequently serve as a means 

 ot detection of failing circumstances on other risks, which to an ordinary 

 observer, may not possess the significance it deserves. In other words, 

 when the smoke has blown away from a failure an investigation of its 

 causes frequently reveals the slow process of one hidden step after an- 

 other toward the final collapse, which if considered in connection with 

 other facts more readily ascertained, should have easily warned of an im- 

 pending embarrassment. 



Conversely, it becomes necessary to be continually on the lookout for 

 clues that may be revealed after starting an investigation of reports or 

 rumors at first apparently unimportant. This is not a process of me- 

 chanical precision, because if It were, the acme of perfection of credit re- 

 porting would be reached. But every effort is made to reach the goal. 



To keep our file of 30,000 reports fresh and up-to-date requires a most 

 careful supervision of massed detail, and the mere statement as to the 

 hundreds of letters and inquiries daily passing through the office can it- 

 self be astounding, but when it is appreciated how all these facts must 

 be tabulated and utilized so that nothing is overlooked, some idea is had 

 ot the bureau's organization and the necessity for trained clerks and as- 

 sistants. 



The bureau's superiority rests largely in the information and opinions 

 received from members who so freely co-operate in furnishing facts they 

 will not submit to other agencies. 



No record is kept as to the amount of the hundreds of trade opinions 

 and experiences daily reaching our office, but with every revised report 

 containing an average of at least a dozen new opinions, some impression 

 is gained of the magnitude of this co-operative plan of credit reporting. 

 More attention has been paid to investigation of antecedents, of follow- 

 ing up local rumors through our own established attorneys, and noting 

 especially the fire hazard, it being more and more recognized that one of 

 the fundamentals to sound credit is sufficient sound insurance. The prac- 

 tice of having salesmen report direct to the bureau relating their personal 

 observations, especially as regards the moral hazard, is becoming more 

 general, and should be encouraged, because frequently much valuable time 

 is saved in starting an investigation that may bring to light important 

 facts, either favorable or unfavorable ; for the bureau's function is two- 

 fold, to warn subscribers away from a doubtful account, and to do no in- 

 justice to a credit risk which is entitled to commendable consideration. 



With lumber credits running to large amounts, the question of signed 

 statements of assets and liabilities must continue to be a paramount one 

 in the bureau reports, and because of the growing influence of the asso- 

 ciation your customers are more freely responding to our requests for this 

 Information. A comparison of reports today with those of ten years ago 

 will indicate the change in this respect, but this has required a constant 

 plan and educational effort to make the customer realize just what this co- 

 operation on his part means. While the signed statement as a basis for 

 credit is becoming a dangerous instrument to treat lightly, lumber buyers 

 generally recognize the desirability of being properly reported, which of 

 course is more easily accomplished when actual inventory figures are sub- 

 mitted with the other facts. 



It is impossible to overestimate the value of the collection department 

 ot the bureau. The claims handled last year amounted to $494,163, as com- 

 pared with $380,355. tor the previous year. Last year, claims aggregating 

 $230,459 were paid with a gain of almost $50,000 over previous year. 

 The increasing number of claims which are paid through the office with- 

 out reference to an attorney is an indication ot the growing prestige of 

 the association, as well as the desire of debtors to maintain their credit 

 In the bureau report. 



—20— 



M. E. Preisch, chairman, read an interesting report on the work 

 of the committee on fire insurance. 



Report of Fire Insurance Committee 



The fire insurance committee in its report presented at the last annual 

 meeting recommended the organization, along mutual or inter-insurers 

 lines, of a company to write fire insurance for our members. Its report 

 was adopted and it was expected that the present committee would carry 

 into efTect the recommendations made. Unfortunately, in the time which 

 elapsed between the retirement of the former committee and the appoint- 

 ment and organization of the present committee, the Lloyd's charter, under 

 which it was expected to organize an inter-insurers company, was pur- 

 chased by other parties. Under the present laws ot the state of New 

 Tork, it is impossible to organize a stock fire insurance company with a 

 capital ot less than $200,000 and a surplus fund of $100,000, which must 

 be fully paid in advance. 



The expedient ot organizing in some other state wheVe the requirements 

 are less difiicult has not seemed practicable. Therefore, it has been 

 deemed necessary to secure an old charter, if possible, under which to 

 organize. 



Your committee is of the opinion that it is desirable from the stand- 

 point ot our association to organize an inter-insurers company which shall 

 be under the direction of its directors and oflicers, provide insurance for 

 its members at a low cost, serve as a lever to keep fire insurance ratea 

 within reasonable limits and at the same time produce a small revenue for 

 the association. 



Workmen's Compensation Laws 



Charles H. Barnabj' reported in a thorough manner as chairman 

 of the committee on workmen 's compensation, a summary of ivhich 

 report follows: 



Thirty-five states have workmen's compensation laws In force. This 

 notable spread of legislation has awakened employers to the soundness of 

 the principle ot certain forms of social insurance. It has become evident 

 that compulsory accident insurance is of general benefit, and it has also 

 become evident that the forms of Insurance not covered by compensation 

 would be beneficial also. 



The principle of workmen's compensation insurance, which is based upon 

 providing against the usual accidents of industry and trade, has opened 

 up a tremendously wide field. Coupled with it and now receiving very 

 marked attention is compulsory health insurance, and in our opinion In 

 a very short time we will have in many of our states compulsory health 

 insurance laws. 



We all appreciate the fact that the injured workman has been very 

 much benefited by the changing over from the old law to the new method 

 of providing compensation to the injured man and his tafnlly. The 

 moneys collected for this purpose now reach the recipients with very little 

 loss, while under the old method much time and money was dissipated In 

 attempting to fight through the courts the various claims made tor Injury. 



I trust you will pardon the chairman ot this committee it he uses 

 Indiana's workmen's compensation law for comparison. We think in 

 Indiana we have a very fair, in tact, a model compensation law. The 

 prime features ot this law are a fourteen-day waiting period; 55 per cent 

 wage basis ; thirty-day medical tee and the right of the employer to fur- 

 nish medical aid. At the closing session ot our legislature, on March 5, 

 however, an amendment carried reducing the waiting period to seven days. 



We also find that insurance rates are increasing rapidly. New York's 

 rates are placing a tremendous burden on the employers. This is especially 

 true In manufacturing and handling of lumber and logging. We have 



