Document 91j7XQmLMvjDa5L7oyo0GBe9V

FILE NAME: Cal Portland Cement (CPC) DATE: 1935-1937 DOC#: CPC002 DOCUMENT DESCRIPTION: Transcript o f Hearing before CA Insurance Commissioner STEPHEN L. BERGER, P.E. PATENT AGENT 4418 Pleasant Valley Court Oakland, C A 94611 (510) 658-2256 April 2, 2012 CALIFORNIA STATE ARCHIVES RESEARCH I have completed the research at the California State Archives in Sacramento. The files are not catalog searchable except for main headings. In general, most of the material I reviewed were filesrelating to workmen's compensation or disabilityinsurance. The fileswere far from complete with a lotofcorrespondence that seemed to be missing. But thatisthenature ofold records. There were veryfew actuallyreferencesto asbestos. Partsofthreefileswere copied and discussedbelow. I believe research at the Archives is finished. _ _ / / r / yf / ______________------------- 7fcfa-eMkirfrr ^ T n From the Division of Industrial Safety were some yearly (or fiscal yearly) tabulations of 'occupational diseasescaused by variousagents. Asbestos was thecause of2 casesin1939,1 case in 1941, 5 more in 1941, and 3 cases in 1942. 2. An employee ofthe Department ofPublic Health wrote a memo after attending a course, "Medical and Biological Aspects of Air Pollution" in 1960. Part of thecojj presentation by Dr. H. L. Falk from the University of SouthemUalifeiia^inung cancer and airpollution. Asbestos isnot mentioned in the msme^Tcio not know ifitwould be worth tryingtorackthiscourse orpresentafionHftTnaynot have mentioned asbestosand we do not know who was atthe course iThe bulk of the copied material was a transcript of a 1935 hearing before the Insurance commissioner ofthe StateofCaliforniadealingwith surchargesforworkmen'scompensation insurance for silicosis and asbestosis. Various insurance companies, industry trade organizations and othercompanies gave testimonyatthehearing. Inaddition,many insurance companies and other companies tried to waive the liability for silicosis and asbestosis as an endorsement to the policies. This was disallowed in a 1937 memo from the California InspectionRating Bureau. However, many companies submitted endorsement forms. Barry recognized one company, California Portland Cement Co., as a defendant in cases. There may be othercompanies thatmay be defendants, orthey may be predecessorsto present day defendants. Lastly, there is a 1937 list of pneumoconiosis surcharge rates for various industries. t ^ C&ui ' ' . Ji^v HfMP W kI I 1-. ,,.W i-J _ --; '.1-- -___i- L :____ -Aks l. _ Bggk&z?. BEFORE THE DEPARTMENT OF INVESTMENT, DIVISION OF INSURANCE OF THE STATE OF CALIFORNIA In the Matter of the Application for ) Silicosis Surcharges ) ) made by ) ) CALIFORNIA INSPECTION RATINGBUREAU ) ) ------------------------------------------------------ ) TRANSCRIPT OF HEARING State Building, San Francisco, California, Friday, November 15, 1935, Ten o 'clock, A. M. HEARING BEFORE HON. SAMUEL L. CARPENTER, Insurance Commissioner of the State of California JR., N. R. Bassett Reporter 23182 7-35 30M CALIFORNIA STATE PRINTING O F F I C E 1 LIST OF SPEAKERS 2 3 HON. SAMUEL L. CARPENTER, JR. 4 MR. DANIEL I, BURS&SK 5 MR, ROBERT M. SEARLS 6 DB. B. C. KBM MR. G. CHESTER BROWN 7. MR. 0. H. GRIGGS 8 MR. ARTHUR N. S W B U 9 MR. HARRY SEARS 10 MR. FB1B KOBE 11 MR. M. J. BROCK . MR. H. R. PLATE 12 MS. PAUL SCHARRESBURG 13 MH. FRANK BROWN 14 MS. JOHN A. 0 *CONNILL 15 MR. 0. F. GROW 16 MR, CARROLL 3TILS0N 17 MR. ANDREW J. KERB 18 MR. EDWARD M. WELCH MR, F, A. M I N O R 19 MR. GEORGE K M I A E D 20 MR. G S O . W. PRINCE, JR. 21 MR. J. J. S T U N 22 MR. B.* F. CAK1 23 MR. WALTER 3, ROUNTREE 24 MR. 1. J. GOODfASTOR 25 MR, A. P. LANGS 26 MR* JS83B M. MAYO Page 1 4 87 21 38 34 36 36 37 43 43 45 46 53 6 63 66 6? 69 71 71 71 73 75 79 76 78 80 84 1 BEFORE THE DEPARTMENT OF INVESTMENT, DIVISION OF INSURANCE 0 OF THE STATE OF CALIFORNIA 4 la the Matter of the -Application for 8ilieosis turcharges made By 5 CALIFORNIA INSPECTION RATING BUREAU ) > ) OF HEARING State Building, San. Francisco, California, Friday, November 15, 1955, Tea o 'clock, A, M. HEARING BEFORE HON, SAMUEL L O A H F M T E R , J R , , Insurance Cosamisal oner of the State of California NRBassett m 23182 7-35 30M CALIFORNIA STATE 1 FIRST HEARING 2 ON THE APPLICATION FOR SILICOSIS SURCHARGES MADE BY 3 CALIFORNIA INSPECTION RATING BUREAU 4 BEFORE 5 SAMUIL L . CAKFSNTER, tTR. * Insurance Commissioner of the State of California 8 FRIDAY, NOVEMBER 15, 1935, 7 T M O 'CLOCK, . M. 8 -- ooOoo-- 9 10 Meeting is called to order by Insurance Commissioner Carpenter* 11 12 13 MR* CARPENTER: This hearing has been called pursuant 14 to a written request o f the California Inspection Rating 15 Bureau ashing the Insurance Commissioner to approve sur- 16 charges in Workmen's Compensation insurance rates to cover 17 the hazard of silicosis and asbestosis in certain industries 18 Sections 11730 to 11742 of the Insurance Code cover 19 the jurisdiction of the Insurance Commissioner in respect 20 to Workmen's Compensation Insurance rates and rating sys21 terns and classifications, and this hearing is called 22 pursuant to the requirement of Section 11734 23 Because of the grave importance o f the subject, it is 24 not the intention of the Commissioner to make an immediate 25 decision upon the question involved, but it is his disposi26 tlon to allow all parties at interest reasonable time to -1 - 23182 7-35 SOM CALIFORNIA STATE PRINTING O F F IC E 1 present their views and such, information as is available 2 to assist him in arriving at a proper adjudication of the 3 matter. 4 W realized on account of the broad scope of the 5 request and the number of groups and industries affected 6 by the proposed change that any system of notification 7 might not reach all persons interested. However, very 8 reasonable effort has been employed to reach as many 9 persons as possible by notice and newspaper publicity. 10 w realize that notices did not reach some of you until 11 a very few days before the date of meeting and that 12 therefore it is not to be expected that you will be present 13 here today equipped to discuss in detail all of the eondi- 14 tions appertaining to the question at hand. M a n y 15 requests have been received for postponement of the hsar- 16 ing based upon insufficiency in the time element. 17 !e feel, however, in holding this hearing and 18 allowing the California Inspection Sating Bureau to 19 present its request here backed by the data it has com- 20 piled that a record may be made here which can be avail- 21 able to interested parties for more mature discussion at 22 a subsequent or ad journed meeting. 23 We also believe it would be helpful to hear those 24 who are prepared today to speak upon any phase of the 25 s u b j e c t . Some fifty or more persons heve indicated a 26 desire to be heard ant those o f this number who represent -a- 2 interests directly affected will be given sack opportunity 2 as time permits. Because of the large number we are 3 going to request a consideration for all those who desire 4 to be heard and ask all speakers to be brief. 5 Those who by limitation of'time may not hays an 6 opportunity for oral presentation or those desiring to 7 supplement oral presentation, are invited to submit to the g Commissioner in writing any comment which they are to 9 present. . . 10 I believe at this time it would be advisable to take q roll of those present a n d the interests they represent 22 i& order that the Gommissioaer may advise t h e m of future 13 meetings or proceedings. A roll will be passed among 34. you with the request that you print your name, address, 15-official capacity and industry or group represented. 16 To save time and permit the greatest convenience to 17 those present, it is requested that recognition o f the 18 chair fee first obtained before speaking, and that all 19 r e m i t s or questions be directed to the chair. 20 I will ask the secretary to pass these roll slips 21 out. Y o u m a y sign' them during the progress o f the meeting. 22 I believe it would fee probably the best order of 23 procedure to ask the California Inspection Bating Bureau 24 at this time to present the matter to this gathering. I 25 believe Mr. Burbank is representing the California 26 Inspection Bating Bureau. A t this time, Mr, Burbank, I  t -* > \ 23162 7-35 30M CALIFORNIA STATE PRINTING O F F IC E 1 will ask you to present th matter. 2 3 ' MR. DANIEL W, Birmmx Representing California Inspection 4 Rating Bureau. 5 6 MR. BURBANK: Mr. Commissioner, I will ask the 7 indulgence of these in the h a c k cf the room. If you d o n 't 8 hear what 1 have to say, if you will raise your hand I 9 will try to raise my voice. 10 Workmen's Compensation in this state is established 11 under a constitutional amendment which is very specific 12 in its statement of the objectives that are to be obtained 13 in every phase of that subject. It is very plainly 14 stated in that constitutional amendment that the legis 15 lature shall provide for adequate insurance coverage. 16 Pursuant to that mandate, the legislature in 1915 17 adopted what was then known as Section 60S (b) of the 18 Political Code, that is, those of the sections of the 19 Insurance Code mentioned by the Insurance Commissioner, 20 which required h i m to approve rates that are adequate for 21 all compensation carriers, and that law requires that 22 all compensation carriers collect, charge and collect, 23 those rates. i'h&t is what is known as the minimum 24 rate law. It is an anomaly in business but it has an 25 excellent reason behind it. 26 fhe sole object of insurance for workmen's -4- ^ 23102 7-33 30M CALIFORNIA STATE satiori is to sake certain that the benefits which the . law gives to injured workmen, and to their dependents when they are deceased, will be paid without question, 'When compensation was initiated in this state there was no such regulatory law. Insurance carriers without a sufficient background for charging rates indulged in corapetitive rate cutting. Some went broke, and the legislature was called upon to do an entirely unconstitutional act by the then Governor Hiram Johnson, to appropriate money from the State Treasury to pay the dependents and benefits to the injured to which they were entitled and which the 12 insurance carriers couldn't pay them. 13 Now then, there is simply one objective in this 14 scheme, and that is to provide and make certain that every 15 wos'kman who is injured and every widow and every child 10 left of a deceased workman shall receive that to which he 17 is entitled. Workmen's compensation is peculiar.in 18 this, that the benefits which the policy provides, which 19 the contract provides shall be paid, are not paid to you 20 employers who buy-'it but are paid directly to the benefi 21 ciaries. You put up the money, the insurance carriers 22 administer it, and the workmen who are injured and those 23 other beneficiaries under the workmen's compensation law 24 receive the benefits. The insurance carriers are 25 direetly responsible and liable in every aspect to the' 26 beneficiaries end to the workmen themselves. -5- 23182 7 -3 5 30M CALIFORNIA STATE PRINTING O F F I C E N ew, one word about the California Inspection Rating 2 Bureau* with the duty imposed upon the Commissioner under 3 this minimum rate law, necessarily statistics and actuarial 4 computations must he continually acquired and. continually 5 conducted. That requires a very large force, and upon the e initiation of this law the then Commissioner required the 7 companies to join in supporting an organization a fact S finding organization and statistical organisation, for the 9 purpose of compiling the experience as we found it under 10 the compensation law for the purpose of making rates that 1 1 are fair and adequate. That is the California Inspection 12 Rating Bureau, and it is nothing more than a feet, finding 13 body which provides the Commissioner with the date upon 14 which he can carry out the duty which is imposed upon him 15 under Section 602 (b), the minimum rate law. 16 Now, we have had come upon us in the last two years 17 a new problem. It is not a new liability, technically 18 speaking, but it is new practically speaking, and we must 19 for the purpose of this discussion consider the problem of 20 silicosis and asbestosis as though there had been, practi- 21 eally speaking, no liability therefor prior to January 1, 22 1933. That is the way it must be approached because prior 23 to that time for eighteen years there had been, relatively 24 speaking, no cases ox so few cases that the effect upon the 25 cost to industry was entirely insignificant. 26 I have had a search made of the records of the -5-  * 23132 7-35 SOM CALIFORNIA STATE. PRINTING O F F I C E 1 Industrial Occident Commission and I think; I am safe in 2 saying that not over ten oases were adjudicated, and we 3 have had the records searched for claims ana I am advised 4 that only seventeen claims during the five years from. 5 19S3 to 1952 inclusive were made. With, respect to these 6 two risks, the cost of those claims was estimated in the 7 neighborhood of 1 8 0 ,0 0 0 , whereas the total amount of 8 losses over those five years - correct me, Mr. Froberg, 9 if I am not correct, was $57,000,000. 10 MB. FROBIBS: 158,000,000. Ml. BURBANK: 158,000,000, less than oue^tenth of Ip one par cent. How, our rates ordinarily speaking are 13 based upon the experience or records we have acquired of 14 the losses in each of your industries over the years, 15 Each year they are readjusted upon the basis of the five 16years preceding. It is therefore apparent that the 17 so-called manual or base rates have not up to this time 12 reflected the cost of silicosis to any significant degree; ]Q it has hardly an appreciable effect. We then approach 20 the subject as though an entirely new liability had been pi imposed which we must determine with respect to its future 22 cost. 23 How, gentlemen, I d o n 't need to tell you that this 24 hazard o f silicosis is quite unique. Two or three items 25 in that respect will obviously differentiate it from 26 anything that in the run of the years has fallen within -7- 1 tiie scope of w o r k m e n 's compensation. As yon well know, 2 the workmen's compensation scheme is in its entirety 3 baaed on insurance principles. You also know that 4 except for these two risks, .silicosis and asbestosie, 5 all hazards under workmen's compensation accrue at a 6 given time; they are susceptible of having their cost 7 or potential cost determined in a relatively short time 8 after they oeeur. Section 602 {a} of the Political 9 Code regulates the reserves which must be carried on 10 compensations aaS those reserves are only required to 1 1 be held for three years* I mention that only to show 12 you how nothing ia connection with any such extended 13 exposure which comes from silicosis has ever been eon- 14 ceived in the laws prior to practically the p r e s e n t .time, 15 I must summarize these distinctive features of 16 silicosis. First, it is rarely disabling until fifteen 17 to twenty years of exposure. It predisposes to tubereu- 18 losis, produces a lingering and long'disabling illness,. 19 it is insidious, it is incurable. Mo statute of limits- 20 tions runs against a claim until an employee is both 21 entirely disabled from work and knows that his disability 22 was caused by silicosis, by breathing the dust. There- 23 fore, we are confronted with establishing the cost of 24 something which projects itself into th future, which 25 is the result of exposure over a period of years, and 26 which historically speaking is of v e r y recent origin. 23182 7-35 SOM CALIFORNIA STATE PRINTING O F F I C E 1 Now, the proposal which we have made to the 2 Commissioner is necessitated by virtue of the fast that 3 we must under the law collect adequate rates* e have 4 no source from which to pay benefits to injured men 5 except premiums that are paid in to us. The sole diffi- 6 culty is to determine how much each industry should pay 7 and ho they should be divided and in what amounts* I 8 might say that our premise included not only the necessi- 9 ty both from the Commissioner's point of view and from 10 our own and from your own and the injured m a n 's point of 11 view, if you please, of an adequate fund to pay these 1 2 benefits, but the second point in our premise is this: 13 With this unique hazard, with it coming on you, as is 14 well known of the history of elaims cost in the east, 15 we have approached this thing from a non-profit basis. 16 W approached it on the basis of pure cost and I will 17 elaborate on that shortly. One word, and I am coming 18 to the basis of this proposal. 19 it is based, of course, upon all the evidence that 2 0 we could secure with reference to the probable cost. I 21 know and we have the advantage of the somewhat limited 22 experience because not over ten years has gone by while 23 this has been a problem in eastern states, the somewhat 24 limited experience of the several eastern states. Before 25 that for many years South Africa has had this problem, and 26 if my memory serves me right, I have the figures in my -9- 23182. 7-35 SOM ' CALIFORNIA STATE PRINTING O F F IC E I brief ease, since 1902 I believe $62,000,000 lias been paid 2 out is South Africa in silicosis claims, and it is estimated 3 that #34,000,000 will be needed to discharge the liabilities 4 now accruing* Probably it is significant that the 5 states of both Pennsylvania and Massachusetts have made 6 official investigation of this subject <at a very 7 considerable cost and have published large reports. I 8 hold here the report of the committee appointed by 9 Governor Pinchot which, as you know, on occupational 10diseases expressly excluded silicosis because it was I I considered that the cost would be too heavy for industry 12to bear. If my memory serves rae right, f2,000,000 a year 13was considered as an initial step in Massachusetts in 14the granite industry and in the foundries. The subject was 15debated back and forth for several years, and finally 16the official report of the Special Industrial Disease 17Committee of Massachusetts, after the authority there 18 ha& heard the subject for more than a year, has this to 1 9 show: In 'November, 1932, the insurance companies filed a 20 rate of $5.00 per #1 0 0 .0 0 of payroll for all stone 0 *1 cutting risks and provided that for risks found to have 22 an extreme occupational disease hasard there would b an 23 annual supplemental occupational disease rate of #300 24 for each person employed. Based on the average annual 25 wage o f #1500, that is $20.00 per flGO.OO of payroll.. 20 #w This rate, excessive as it m y seem, appeared to -10- 23182 7-35 SOM CALIFORNIA STATE PRINTING O F F I C E 1 be justified by the evidence and indicates the extent to 2 which losses in the industry have increased since the 3 decision above mentioned, the decision above mentioned 4 being one made in 1927 in the famous Patrick Sullivan case 5 which held these cases compensable, The approval of this 6 was delayed for nearly a year in ,,.the hope that future 7 experience would render such an extra increase unnecessary. i 8 it was approved as of December 1 1933, subject to the 9 condition that the approval will be withdrawn on March 1, 10 1934, if at that time a merit rating plan has not been 11 established for this industry. It proceeds to say the 12 merit rating plan would be a plan by which employers 13 would receive credits for prevention work, something 14 that hadn't been worked out at the time. The #300 per man 15 charge was put on in Massachusetts and the condition 18 there was obviously to compel action in that respect. 17 One word with respect to why we call these proposed 18 rates *surcharges'. As you know, there is a very 19 extensive manual of compensation rates in this state, 20 devised for the purpose of recording the experience of 21 various exposures and hazards in various industries because 22 the basic idea, one of the basic ideas in making workmen's 23 compensation rates, following up the fundamental theory 24: of the law originally, is that each industry should pay 25 the cost of its own losses, and that is only possible if, 26 of course, records are kept of the losses of each industry, - 11- 23182 7.35 30M CALI FXHIA STATE PRINTING O F F I C E 1 and that is hat the Hating B u r e a u * a .business has been 2 aad continues to be. We call these 'surcharges* because, 3 as I explained to you heretofore,.at present the rates 4 include no appreciable charge for this hazard, and this is 5 a new hazard; we are not certain of what the cost is going 6 to be ultimately in California. we have felt that the 7 major basic rate structure of the state should, not he 8 complicated by this problem. We felt that any charge put 9 on for the purpose of meeting the cost of this particular 10 hazard should be separately set forth, and it is a part 11 of our proposal that not only shall it be a separate and 12 distinct charge for this hazard, but that in the future 13 separate experience ill be kept for each industry and 14 records of all losses and claims and cost of every kind 15 reported so that there can be an allocation without any 16 question of comingling of data as to this particular 17 hazard. It is too serious to be treated otherwise.' The 18 rates which are proposed are maximum rates, they are high 19 rates, and I blame no industry for being very seriously they are 20 concerned with the rates proposed, but/based upon all the 21 evidence we can get, and if there is any other to be had 22 or if it can be supplemented we welcome it, they represent 23 the best ideas of our actuarial experience as to -ghat we 24 can safely carry your load for, this proposed rate earing 25 for the beneficiaries of w o r k m e n s compensation who may be 26injured through these diseases. 23102 7-35 SOM CALIFORNIA STATE 1 This r a t e is a maximum rate. Of co u r s e , we have to 2 fix a maximum, It is not the minimum, however. We 3 propose, upon the premise that w desire no profits what 4 ever from the premiums collected from this hazard, we 5 propose concurrently with these charges and as a part of 6 the plan proposed to the Commissioner to provide for an 7 annual adjustment of the rates retroactively on t-he basis 8 of the annual claims experience developed in the various 9 industries; that is to say, immediately upon the expiration 10 of all policies issued in any given policy year, the Bureau 11 will tabulate the payrolls and losses for that policy year 12 and upon the showing of the experience for that year will 13 adjust retroactively the surcharges originally made for 14 that policy year to the carrier who will then, make an 15 adjustment with its assured on the basis of the adjusted 18 rates. 17 Translated into plain -S&glish, that means this: 18 Y o u buy a workmen's compensation policy today and you pay 19 a deposit premium for it. Monthly or quarterly you render 20 a statement of your payroll to your insurance carrier and 21 he sends you a bill for the amount of money that the appli 22 cation of the rate to that payroll calls for. At- the 23 end of the year, if you have not had a payroll which has 24 required all of the deposit, then you receive an adjustment 25 bach. If by the application of the rate to your payroll 26 a larger sum of money is required in excess of what you , 13-- 23182 7-3S -30M CALIFORNIA STATE 1 have deposited then you pay something more. 2 By policy year, in insurance language, we mean 3 practically two years because it means that every policy 4 issued, we sill say, during the year 1935, must expire 5 and of course they cannot all expire until December of 6 the following year. 7 How, we propose to the Commissioner that the 8 surchargesswhen fixed and as fixed for these rates, he 9 dealt with exactly, as I have outlined and, as you know, 10 your premiums are handled now. la other words, if you 1 1 pay a surcharge for silicosis, then at the,...end of the 12 policy year period, when your payroll is completely 13 audited, if your industry has not required in its.losses, 14 by its losses, in the cost of handling, the fund which- 15 you have paid in, then that ^i?ill be proportionately IS refunded to you by each carrier to whom you have paid the 17 money. That is a cost seheme, but it starts with the 18 premise that me must have the money to meet as nearly as 19 csn be determined the anticipated cost, otherwise the 20 law cannot be complied with. Otherwise we would be 21 gambling and we cannot gamble, we are not permitted to 22 gamble. The law would be defeated if we wars permitted 23 to gamble,but this scheme will take care of itself by 24 adjustment each two years, and as experience has developed 25 the rates which the Commissioner will make as a result o f 28 this proposal can b e adjusted either as between industries -14- 23182 7 -3 5 30M CALIFORNIA STATE PRINTING O F F I C E 1 or as an Individual industry* It is a matter of gaining 2 experience and at the same time playing safe sc that there 3 can be no question but what the beneficent objectives of 4 the workmen*s compensation law can be taken care of* 5 Let me emphasise this, that not one nickel of 6 profits out of these rates will go to the sorapensatioh 7 insurance carriers. They are in general but service 8 organizations, and in this respect the rating scheme we 9 propose will expressly provide that the money you pay in * 10 x ill be held as a reserve for the purpose for which it is 1 1 m i d . If it is not used by the industries, then it will 12 be returned* 13 Wow, that undoubtedly means this: cannot say to 14 each individual man that if your money lentt used by ihe 15 claims in your plant we will return it to you. We have 16 to have a spread over industries and you gentlemen will 17 have to polio your own industries because one of the 18 major objectives of the workmen's compensation law is 19 prevention, and you know that prevention pays, and there 20 will have to be, I assume, some steps toward organisation 21 whereby the industry as a whole will undoubtedly act to 22 prevent losses from these diseases, and if that is done 23 the problem will be in a major portion solved. 24 flow, in connection with this proposal we bave also 25 proposed a scheme for so-called schedule rating. These 26 rates are not subject to experience rating, that is to say, -15- 1 the experience of each plant. That is impossible* But2 we do propose Tibet is knows in insurance as schedule 3 rating, that is to say, under a definite scheme provided 4 as part of the plan filed with the Commissioner, if any 5 given plant engages in what is known as good housekeeping, 6 if they segregate their dust exposed employess and do 7 -certain specified and possibly engineering acts to prevent 8 their employees bding disabled from this exposure, then 9 it is possible under this plan for- them to immediately 10 reduce the initial charge as much as 40$.. 11 Speaking of the experience of other states, I 12 failed to mention probably the most important source of 13 information we have which is Wisconsin, 7 will go back 14 to that just a moment and then I will be through. 15 Wisconsin has e great number of foundries, and in 16 connection with our proposal we filed the Wisconsin dust 17 disease loss experience. That is at the Commissioner's 18 office for you to investigate, and I will simply say that 19 the jump in losses after workmen, after ambulance chasing 20 lawyers became aware and after doctors became educated 21 la silicosis, jumped tremendously in Wisconsin as it did 22 throughout many other states, but the other states' 23 experience is not useful to us because in the main those 24 states permitted actions for damages, and as you well know 25 there are 1-300,000,000 to $500,000,000 in suits pending, 26 with over #2 0 ,0 0 0 ,0 0 0 pending against the foundries of 23182 7-35 SOM CALIFORNIA STATE. PRINTING O F F I C E 1 New Y o r k State, That is of no use to us here because 3 it teas no compensation experience. 3 Now, in ^iaconsin, for tb purpose of paying losses 4 alone,, without any charges for expenses, the experience 5 showed what we call the pure premium, that ,is for losses 6 alone, for the years 1930 and 1933, the amount indicated 7 par hundred dollars of payroll were these .figures: 8 For Iron Foundries: $1.60 in 1930 10.10 in 1932 9 Steel: 3,SO In ' 193 10 24.00 in .1932 11 Stone Gutting: 12 w quarries : 13 4.90 15.90 9 50 19.17 in 1930 iii 1932 in 1930 in 1932 14 That is experience* low, gentleman, it is true that 15 in Wisconsin they went out on a campaign of mdical IS examination, and developed a great many of these risks, 17 However, the facts are these: The available data included 18 includes that prepared by the National G s m s el, that is 19 an organization nation-wide very much as due- Bureau is 20 for California, in connection with the study of the 21 problem and th experience, dust experience, developed in 22 Wisconsin which has been made use of in other states. 23 The major portion of the Wisconsin experience covers the 24 foundry industry which nation-wide has contributed the 25 greatest number of cases , followed b y the granite 20 industry, quarries, and so forth. The exhibita will 23182 7-35 SOM CALIFORNIA STATE PRINTING O F F I C E 1 show the following: In Wisconsin, for foundries, in 2 1930, there was an average of one ease reported for each 3 200 employees. In 1931, there appear a case for each 4 100 employees. By 1932, which was the peak year, there 5 was an average of four cases per 100 employees, These 6 averages are produced by taking the numbr of eases for 7 each IlSOO of payroll. In making the schedule of rates 8 we propose here, the Committee began at that point and 9 estimated for the foundry classification one case per 10 100 employees. N e w York, in making up their schedule, 1 1 took two per 10 0 employees, but took a smaller estimate 12 per cost f each loss. S set #10 ,0 0 0 as being the 13 average claim and flSOO as being the average annual 14 payroll per employee, which produces a pure premium, that 15 is, actual loss cost, of #6.77 for the foundry elassifi- 16 cation. 17 Now, there was practically no experience, no 18 reliable experience, on other occupations than foundries, 19 and it was necessary in making up these rates, and it 20 has been necessary everywhere in the Union, to determine 21 a relative degree of hazard between what was taken as 22 known cost in one industry and what was known as a hazard 23 in another industry, and that was done b y a group of 24 engineers over several years' study and adopted ia New the relating of 25 Y o r k and it is ealled/the degree of risk of the basic 26 standard taken from the foundries to other matters. That 1 la a matter of ju&graent, and we d o n ?t know where to find 2 any better way o f doing it- That is the way that it was 3 produced and that is the way that other ra t e s 9 other than 4 foundriesj here are computed, 5 How, on the schedule there was included marble. 0 Y ou have the schedule of rates, and Classification Mo* 7 1803 included marble and stone cutting* That was an error 3 because marble is limestone and not silica and has been 9 eliminated- Also there was another error in elassifi- 20 cation Ho* 3632} machine shops should not be inserted at all 21 and they have been entirely eliminated, 13 Without going into more detail, I want to add Just 23 one thing. Insurances carriers here, the Bating Bureau 14 rather, supported by all of th insurance carriers of the 15 state, are trying to do that which the law, from th 13 Constitution down, says must be done. In proposing these 17 rates, high as they are, there is absolutely no element 18 of retaliation because we were unable at the last legis- 19 lature to secure a modification or a definition of* the 20 benefits. That is a closed book as far as we are concerned. 21 We probably will have never anything more to do with that 22 subject at Sacramento. I merely make that statement due 23 to certain unfortunate newspaper comments which had no 24 foundation in fact with respect to our motive. This is 25 purely a business proposition, pure and simple. 28 In conclusion, I simply want to say that there is . 18929 2 - 3 5 2QM CALIFORNIA STATE PRINTING O F F IC E 1 but on objective to this whole matter end that is 2 protection. We want to give you protection et actual 3 cost and without profit. We have gathered all of the 4 evidence that we can find on the subject. 'We believe 5 that what we have proposed in the way of rates are neees~ 6 sary for protection, and w have suggested a plan whereby, 7 if our estimates are wrong, you will get your money back 8 provided your industry as a vfhole so proves* On the 9 other hand, don* t forget that there must be money to pay the 10 claims of injured workingmen and death beneficiaries, and 1 1 we are trying to work this out. on a basis as fair .and 12 equitable as possible and we are as open minded as can 13 be on the subject* 14 15 MR. CARPENTER: Will anybody else speak for the 16 Bureau, Mr* Burbank? 17 MR, BTJRBANI: Mo, 18 19 (Ten Minutes Recess.) 20 Meeting is called to order b y Mr. Carpenter. 21 22 MR. CARPENTER: !e will now proceed by permitting 23 those who have signified their intention of addressing 24 this gathering today upon the subject in question to 25 have that opportunity, I think it would probably be 26 better and conserve time and give greater opportunity to -EG- 23182 7-35 30M CALIFORNIA STATE PRINTING O F F IC E 1 all who wish to be b e a r d , to take this matter up by 2 industries. The mining industry, so vs are informed by 3 letters and eomaunieations, .is represented here today by 4 the organisation of California Metal and Mineral Producers 5 Association, Mr. Brown, Dr, Kern and -Mr. Searis, I believe, 6 among others, representing that particular association. 7 Save yon decided among yourselves which one you want to 8 address this meeting? 9 MB, S1L4BL8 : Mr,. Chairman, I s u r e s t Mr. S e a r l s , 10 (myself), Mr* Brown and then Dr. Kern, 11 MB, CABPMT1R; Very well, we will give the floor 12 to Mr. Robert M, Searls, attorney for California Metal 13 and Mineral Producers Association. 14 MR. ROBERT M. 3 SARIS 15 representing California Metal and Mineral Producers 16 Association. 17 18 MR. S1ARLS: Mr. Commissioner, the gold mining 19 industry of California received the notice sent out by 20 your office very much as a bolt out of the blue, a n d is 21 the few days that it was possible for us to give some 22 study to this matter we compiled and I have presented to 23 y o u a memorandum of our points, and it is our desire, if 24 there Is to be a eoxstinuanee, that we be afforded the 25 opportunity to present additional information which has 26 come in since and will come in. I presume that will be -21- 1 permittee!? 2 . ME. GAHPBHTBR: Shat will be all right* 3 iSE. S E A R L S : i -was v ery glad, Mr, Commissioner, 4 to have such a frank statement come from our friend Mr, 5 Burbank because s are able to realise now the basis on 6 which the Inspection Rating Bureau has proceeded. 7 In brief, they have proposed a surcharge on the 8 compensation rates of the gold mining industry of: ill.00 * 9 plus for underground, $14,00 for mill and ?5.00 for surface 10 workers, based on the experience hazards o f iron foundries dusty 11 in Wisconsin,/ mines in South ivfrica, and'some steel mills 12 ia Massachusetts* What on earth the dust conditions in 13 those places have to do with the operating conditions in 14 the gold mines of California, I d o n 't know. It mad me 15 wonder as I listened to the presentation whether the 1Q Inspection Bating Bureau had made any study of the dust 17 conditions of California gold mines, because the only 18 thing that can cause silicosis is dust* fhere is nothing 19 in their statement to indicate that they have made such 20 investigation and, as Mr* Burbank frankly stated, they 21 have proceeded on the assumption that there is no experience 23 and that there are going to be terrific losses incurred* 23 e are all willing to concur with Mr, Burbank, I am 24 sure, that the gold raining industry must stand its own 25 cost o f its own hazards, e are willing to concur with 26 h i m that ia the insurance business there c a n 't be a separate 1 rate offered to every sine. On the other hand, I thistle Mr. 2 Burbank ought to concur with us that in all fairness the 3 California gold mine owner and operator should not have 4 his cost rated in advance on the assumption that the 5 losses which the insurance carriers are going to have to 6 pay will be these that were paid by iron foundries in 7 Wisconsin, in lew fork, and gold mines in south Africa, a and if I can demonstrate to the Commissioner the basic 9 reasons why that is not so, I think that the statistics 10 will amply corroborate me, such as we have. 11 In the first place, s I ca n show through sir. Brown, 12 Secretary o f the Metal and Mineral Producers Association, 13 who for twelve years was safety inspector of the Industrial 14 Accident Commission, the California gold mine in the past 15 twenty years has not offered a substantial silicosis 18 hazard, and I d o n 't mea n by that that there are not many 17 m e n employed in California gold mines who suffer from 18 silicosis or have suffered from it, b u t ! do say the 19 condition is not due to the operating conditions in the 20 California gold mines. ` 21 The reason for that is that without exception, or 22 possibly with the .exception of only a very few mines in 23 the desert country, not a substantial part of the mining 24 industry, the California gold mines are what is termed 25 wet mines, The dust does sot fly around in the air under 26 natural conditions because there is too much water to make S3TC2 7-35 SOM CALIFORNIA STATE PRINTING O F F I C E 1 it fly. In the second place, under the safety regulations 2 of the Industrial Accident Commission, during the past 3 fifteen or treaty years the use of water drills has been 4 mandatory. With the wetting down of muck piles and the 5 prevention of the spread of dust in drilling, that is 6 something that couldn't happen very well as it could in 7 the iron foundry. The same is true of the quartz mills. 8 This muc k is hauled to the surface and there is no dust 9 to fly around and cause silicosis. 10 Those are conditions that obtain in the California 1 1 gold mines today, and it can be substantiated by the 12 simple proposition of taking a few dust counts, if the 13 Inspection Rating Bureau desire to do so. 14 I happen to represent the Empire-Star Mines- Company 15 operating in G-rass Valley and. Nevada City. We have had 16 dust counts taken'in our mines and we find the dust 17 count to be a negligible factor in the North Star, 18 Empire, Pennsylvania and Murehie - I believe those are 19 the principal properties operated by this company. 30 Similar counts, I have been informed, have been taken 3 1 on the Mother Lode and I am anxious to get the same to 33 furnish to the Commissioner, if you gentlemen have 33 them, which will substantiate this same condition. 24 Now, under those circumstances, what justification 25 is there for an assumption that a miner working in a 26 California gold mine is going to contract silicosis in -24- 23182 7 -3 3 ` 20M 'CALIFORNIA STATE PRINTING O F F I C E 1 the same degree that he would contract it working in 2 a dusty foundry in the east somewhere or in the well 3 knows very dusty mines of South fries. 4 Mr. Burbank might very well ask me, "S.ow, t o , 5 does silicosis arise in California?" It arises, 6 Mr. Commissioner, largely because men employed in the 7 mines drive from plaee to place, and many coming into 8 this state are already suffering from silicosis acquired 9 in other communities and other countries. Is the 10 State Industrial Accident Commission going to assess 11 against the California gold miner the entire cost of any 12 disability resulting from silicosis contracted in that 13 manner? I suggest there is nothing in any decision 14 of the Industrial Accident Commies ion yet to justify 15 such an enterprise, and I judge the representatives of 16 the Commission themselves can speak for themselves as 17 to that fact, If the California mines are wet, if 18 the silicosis hazard is practically non-existent as 19 yet, then why should the Inspection Bating Bureau g e t 20 hysterical over the assumption that huge costs are 21 going to be assessed. I imagine that this hysteria, 22 as I have termed it, has arisen from the fact that 23 within the past two years since the decision of the 24 Supreme Court in the Marsh case, holding that the 25 statute f limitations doesn't begin to run until the 26 employee discovers he is suffering from the consequence *1 25- 1 of silicosis, that they think that means there are going 2 to be big awards. I submit t hat it means nothing of the 3 kind, and because'I feel that that is the most potent 4 factor in the 'whole situation, I had Mr. Brown make a 5 very careful investigation of the records of the Industrial 6 Accident Cojaraission of a number of claims pending and 7 of the amounts of those claims and of the amount of pend- 8 ing settlements. B e reports to me under authority of of 9 Mr. Hyatt' that^a list of these claims which I have sub- 10 mitted in my brief here, and also Mr* Hyatt's estimate 1 1 of the amounts for- which they can be settled today, the 12 total of those amounts is about #1 0 ,0 0 0 . The proposed 13 compensation surcharge on the Sapire.Mine alone at Grass 14 Talley would be #140,000 a year, fourteen times what the 15 Industrial Accident Commission actuaries estimate the 16 total cost of settling all the claims that have been filed 17 today* 18 I will ask you if that- isn't better evidence for the 19 necessity of the surcharge than the experience of Iron 20 foundries in Wisconsin of mines in South Africa. I don't 21 claim any familiarity with the South African procedure 22 hut 1 understand their mines are very dusty there, that 23 it is a foregone conclusion that the native labor that 24 are mostly employed there will contract silicosis in a 25 short time and that very high reserves have to be set up 26 for that reason. 23182 7-35 20M CALIFORNIA STATE PRINTING O F F I C E 1 While the carriers are entitled to be protected 2 against loss, the insured are entitled to see that the 3 rates do not exceed whst is a reasonable reserve, and that 4 reasonable reserve should be based on California gold mine 5 experience and not on hazards vihieh are non-existent in 6 California gold mines. 7 I submit therefore as a first basis for denying this 8 application that they have not shown the experience or any 9 basic facts upon whieh a proper surcharge could be based 10 if one were desirable. furthermore, that the probabili- 1 1 ties, based on the experience of the last two.years, - T 12 d o n 't as k them to go back of that - d o n 't indicate that 13 the insurance carriers are going to be called upon to. 14 pay any large additional sums on account of silicosis. 15 I think, of all claims filed with the Commission, 16 a large percentage of them were filed by one attorney 17 largely as a result of some labor disputes, and a great 18 many of those were filed against a self-insurer. As 19 far as the carriers go, they need not weep in apprehension 20 over what that particular bunch of claims will cost them. 21 Mow, the second point I want to sake is that Mr. 22 Burbank, while he has stated that there was no intention 23 to charge a profit against the California gold miner, he 24 has not stated that the surcharge would not include this 25 famous 40% loading for overhead fehieh is characteristic 26 of all compensation insurance rates. That 40% has been 27- ' i 23182 7-3S SOM CALIFORNIA STATE PRINTING O F F IC E 1 broken down at various times and includes I think 17$ fox the cost of acquiring the business, Just why the 3 compensation insurance company has to pay 17 $ for the 4 cost of acquiring the business in an industry where 5 insurance is mandatory, I have never been able to see. 6 But at any rate, if a 40$ loading is justified in a 7 base rate, on that possible basis is it justified in a 8 surcharge rate,, in the rate where the carrier goes, to 9 the existing customer and says, HWe are going to charge 10 you 14$ more this year*'' Does that need 17$ for acquisi 11 tion of business? Boss it need a lot of additional 12 bookkeeping? Does it need additional overhead for 13 the president's salary and the rest of it? I submit 14 it does not, and unless Mr, Burbank is prepared to show 15 that is pure premium rate on which this proposed sur 16 charge is based and does not include these overhead 17 factors which obviously have no relation whatever to it, 18 I say he has not sustained the position which he took of 19 charging a rate which would not yield a profit. 20 The third proposition I wish to make, Mr. Cosimissioner 21 is that the surcharge proposed here will be self-defeating. 22 The gold mining industry cannot stand a surcharge of 1 1 23 to 14$ on its payrolls in order to meet these hazards 24 either now or at any future time. If the Commissioner 25 wishes to approve a rate which will put a large number of 26 mines in this state out o f business, eut down the number 23182 7-2 S SOM CALIFORNIA STATE * PRINTING O F F ) CE 1 of employees and presumably increase the hazard as to the 2 rest, that may be within the scope of M s desire, because 3 the smaller number of things you have, as a rule, the 4 less the spread of the average and the greater the 5 individual hazard, 6 While I think the working man himself is entitled to 7 some consideration, the imposing of a surcharge which 8 would necessarily result In the abandonment of marginal 9 operations and the discharging of hundreds of men cannot 10 be to the benefit of the individual worker 11 I will come in a moment to the individual position 12 as far as health goes, but looking at it from the stand- 13 point of economies, there has to be a balance between 14 the rates, and that is possible, The reason that there 15 has to be a balance is that there can be no addition to 16 to the price of our product to meet these additional 17 costs, That price is fixed by law, it cannot be 18 increased* If you increase our payrolls from 11 to 14$, 19 you simply take it out of two places; you take it out 20 of the mine owner's pocket or you take it out of the wage 21 earner*s wages. 22 From the standpoint of the mine owner, while there 23 has been a great increase in the production of gold in 24 California owing to the increase in 'pries of gold, I have 25 no hesitation in saying from an intimate knowledge o f the 26 situation that by far a greater portion of the increase -29- 23102 7 -3 5 30M CALIFORNIA STATE PRINTING 0 FF1CE 1 is marginal* fhat means the owner M s invested his money 2 and he h asn't got it bach and hasn't anything in his 3 pocket to pay anything out of the eost of operation 4 As far as the working man goes, in view of his 5 present eircuiastaaees, I am willing to let the working 6 people speak for themselves as to whether they can stand 7 a reduction of wages to take ear pf this compensation 8 surcharge which is proposed* 9 Sow* so far as the individual working man is oon- 10 o e m e i , I a m going to ask the 0 Basissi oner's indulgence 1 1 to Jet Dr* Kern of Jackson* who is familiar with the 12 Mother Lode where most of these eases have arisen, say a * 13 word about the pathological conditions or medical condi- 14 tions which arise from silicosis when I get through, but 15 in general silicosis of itself is not going to greatly 16 increase the workingman's unhappiness, If the working- 17 man has contracted silicosis, it is Just as dangerous 18 for him to work on a farm or in a factory as it is to 19 work underground in a California gold min where the ore 20 is kept moist and where there is a more dust than he 21 would find in many surface occupations, not to mention which 22 those mentioned by Mr. Burbank, and the compensation/he 23 is entitled to receive accordingly should not be increased 24 in the mining industry any more than it would b e anywhere 25 else, 26 The California gold mines have been operated for - 30- 23182 7-23 30M CALIFORNIA STATE PRINTING O F F IC E 1 many years. Mr. Burbank says their experience claims 2 hack of 193S were so few in number and so small in. amount 3 that they could he disregarded as an increased element 4 in cost, and if that he true I see no reason why the 5 same condition cannot be anticipated for the future. It 6 may be that a few new eases of legitimate silicosis 7 Claims will arise and awards will he made hut I claim 8 the amount of those awards so far as charged against the 9 California employer is nothing which our present exper- 10 ience indicates will be excessive or cause undue alarm \ 11 in insurance circles. 12 For these reasons I submit, Mr, Commissioner, the 13 increase should b e denied, hut in order that you say he 14 perfectly well informed on this I think there should be 15 an adjournment of this whole natter and the mining 16 industry should he permitted to compile more accurate 17 statistics than it has already submitted to you, and if 18 there is any answer to those, my friend Mr. Burbank should 19 be permitted to make it, hut I say his answer should be 20 something more than the experience of Wisconsin or South 2 1 African gold mines to justify these surcharges in 22 California gold mining compensation insurance. 23 May I ask Dr. Kern and Mr. Brown a question or two? 24 m b . C A B P M T 1 R: Mr. Sear Is, it is not with a view 25 to cutting you short but with a 7 lew to making the meet* 26 ing available to as many people as we can today. I would - 31- mm 23182 7-3S 30M C ALIFORNIA STATE PRINTING O F F I C E 1 like to suggest if we can get through, with the individual 2 speaker in ten minutes it would he advisable. 3 MB. 322AKL8: I just want to ask one or two questions, 4 these men can give you first-hand information. 5 (ihe following questions were propounded 6 b y Mr. Searls and answered hy DR. 3. C,. EBRf? of Jackson, California.} 7 8 MR. 3 EARLS: Dr. Kern, how long have you been 9 practicing medicine? 10 DR. KEHK: Twenty-six years. 11 ,$* H o w long have you been practicing medicine in 12 mining communities'? 13 A. Sines 1909. 14 Q. That is in the Mother Lode principally? 15 A. Principally. 16 Q, How many men have you had occasion to examine 17 with reference to whether or not they had dust in their 18 lungs or evidence of silicosis? 19 A. I .can't s a y off-hand but a great number. I 20 have made an exhaustive examination of eighteen m e n whose 21 cases were recently heard. 22 %. Would you state to the Commissioner in your own 23 words what you think of this silicosis hazard from a 24 medical point of view. 25 A. In the first place, Mr. Commissioner, to the 26 medical man the use of the word silicosis seems a bit out - 52- 23182 7-35 30M CALIFORNIA STATE 1 of lias. -Silicoses is one of a group of disease under2 the heading of pneumoconiosis which means organic or 3 inorganic material is the lungs irrespective of the amount. 4 I might say, with reference to recent claimsthat 5 have corns up, of 'the death eases, -without exception the 6 primary cause of death as decided by myself and numerous . i 7 other physicians including the superintendent of the 8 sanitarium at Waiaar, the primary cause of death was 9 pulmonary tuberculosis. In some few of those eases, 10 since this question has come up over the compensation of 11 claims for injuries sustained through inhalation of dust 12 in the mines, there have been to the best of my knowledge 13 out of fifty-seven c a s e s , from thirteen to fourteen in 14 which pneumoconiosis was given as a contributory factor, 15 and a fewer number, I think not more than seven or eight, 16 where silicosis was specifically mentioned as a contribu- 17 tory factor* 18 Silicosis from a medical standpoint is a very 19 difficult problem, vie do not know much about it. It is 20 hard to interpret. If radiographs of the chest are made 21 with proper technique,of the chest which contains siliea 22 dust in any appreciable amount, and that chest is not 23 complicated by other graphic or acute pulmonary conditions, 24 we can m ake a diagnosis of silicosis. In the great 25 majority o f the eases, some fifty-seven, I believe, the 26 chest films are so coated by pneumoconiosis and by signs 33- wsr' 23182 7-35 30M CALIFORNIA STATE PRINTING O F F IC E 1 of pulmonary tuberculosis that it is Impossible to say 2 that those men were suffering from silicosis,. 3 MB, SS&HLS: her silicosis has occurred. Doctor, 4 is it your opinion that there would, be -- 5 SB. F.EM: Would you mind using the word *dust 6 disease'? 7 Q,. Where you find dust disease occurring in 8 these gold miners, do you thiate there would be any 9 materially greater hazard of their incurring pulmonary i 10 tuberculosis from continuing to work underground than 1 1 if they were to get outside employment, including hard 12 labor? 13 k, I think not, She existence of pulmonary tubersu- 14 lois is directly dependent on the infection of tubrculosi 15 bacillus. X seriously doubt whether we have more tubereu- 16 losis bugs floating around because of underground work. 17 Do you believe that where you have those eases 18 that some of the might be caused by housing conditions 19 or living conditions? 20 A. We have a certain percentage.of tuberculosis 21 among any group of sen, but in the mining districts, 22 particularly around Jackson, housing conditions, especially 23 boarding houses, ars so bad that in my opinion they are 24 the biggest single factor toward tuberculosis infection 25 among the miners employed in that district. 26 Q, That is not an industrial hazard? ^s55a - 1 A. I think not* 2 MB. SSAKL3: That is all,I wanted to ask. 3 ask Mr. Brown about three questions? May I 4 ' (The following questions were propounded 5 b y Mr. searls and answered by MB* <*. CHS3TER 3KGV<H, Secretary, California Metal 6 and Mineral Producers Association*) 7 MR. 31ABLS: Mr. B r o w n y o u are a mining engineer, 8 a graduate of the University of California? 9 MR. BROWS: Yes, sir* 10 4 * 'How many years were you employed by the 11 Industrial Accident Commission as Safety Engineer? 12 A. Twelve years; seven years as chief inspector 13 of mining and five years as deputy. 14 4. H o w many of the California gold mines did you 15 have occasion to visit in the course of your employment? 16 A. I visited all operating properties, and the 17 larger properties two or three times a year. 18 14. Shat were the regulations of the Commission dur- 19 ing the time you were employed as to wetting down the 20 underground workings? 21 a . Requirements in connection with dust, the 22 prevention of dust in mines, applied as tq kit we term 23 wet drilling and in dusty rock piles where m u c k aoeuara- 24 lates, or ore, so that there would not be any appreciable 25 amount of dust in the mine atmosphere* 26 4* Were those regulations generally observed? 1 m , BROWR; V1oC?afe9 sir, ' If a condition arose in a 2 mine where va believed that they were not feeing I 3 observed* there was an ortsr issued to the effect and 4 it was corrected, but that condition only arose 5 occasionally, 6 Q,* Shat is your opinion as t dust conditions in 7 the average California gold mi n e , the hazard involved ' 8 in this hearing? 9 A . As a rule, in .California m i n e s , except a few 10 desert mines, and incidentally there are no silicosis, oases 11. apparently charged against the desert mines, the humidity 12 in the mine atmosphere and the water that percolates 13 in the mine workings prevents any amount of dust in the 14 mine atmosphere, and in my opinion from observation, and 15 I have worked not only in California but in lots of other 16 states in an experience of shout thirty years, I will 17. say that I consider California mines are dust free com- 18 pared to mines In other states* Colorado has a good 19 condition, they have a similar condition to California 20 as to the type of mines, the humidity and moisture in 21 the mines. Hewada on the other hand is far from it and 22 the record from illness with dust disease in itfevada is 23 very poor. 23182 7-35 SdM CALIFORNIA STATE 1 condition. You have the Kaffir labor there who in many 2 eases are infected with tuberculosis to start with* It 3 is a condition that has existed for a good many years 4 until the Government stepped in some years ago to 5 correct it* You cannot compare any South African mine 6 with a California mine. Mo figures will sustain it* 7 There is no comparison between the sines* 8 'l, Bid you at ray request make 'a record of all 9 cases filed in the Industrial Accident Commission of 10 California since 198S? 11 A, A H those eases that were filed there in the 13 recent period, from that period on, were examined, yes,sir, 13 Q,, Have you also examined the records set forth in 14 the brief I have filed with the Commissioner here? 13 A Yes 16 Q.* Is that a correct transcript of the record as 17 you found it there? A, Yes. 18 4 % o is responsible for the statement as to the 19 amounts of the pending settlements? 20 A* Mr, Hyatt and myself discussed each ease, 21 $ Who is Mr* H y a t t ? . A. Chief of the Claims 22 -division of the Industrial Accident Commission. 4. And the total of those suggested settlements 24 was about $10000? 25 A. #10,00,00* MS, SSARES: , I think that is all. ^hat is our case, - 35- 23.182 7 .3 5 2PM CALIFORNIA STATE PRINTING O F F I C E 1 M r Gommi ssioner 2 m b . CABPBHTSB: Thank you, Mr* Searls, Are there 3 other representatives of other mining interests here who 4 desire to he heard at this time? 5 Wi, 0. H. GRIGGS 6 Los Angeles, representing 7 Mining Association of the Southwest. 8 9 - MR* GRIGGS: 'Mr. Commissioner, X am representing 10 the Mining Association of the Southwest. I have a XX petition here asking that this hearing he continued and 12 that a subsequent hearing be held in the southern part 13 of the state, in Los Angeles. 14 m . CAHPESTER: That will be done. 15 MR. GRIGGS: Our mining Industry there is an 16 important industry and this proposed surcharge rate 17 would abolish the mining industry in the southern part 18 of the state* We have had no time to prepare the 19 data for this, 20 .. BIB. ARTHUR H, SWEET 21 representing 22 AUBURN CHICAGO MINIMS COMPANY 23 MR. S U I T : I sent you a letter requesting permission 24 to appear today. Our ease has been presented so 25 thoroughly by Sir. Searls that on account of the hour I 26 waive the opportunity. I made up my mind not to some today but all ray men insisted that I come d o m as they -36- ft :? 3 1 8 2 . 7-33 20M CALIFORNIA STATE I thought they would as out of a job and insisted that X. 8 Q-Offi 3 MB OABFSMTER: Anybody els representing the 4 mining industry? 5 MR* HABH5T S16.RS 6 representing State Wide Mining Industry Taxation 7 Committee. 8 MR. 8EABS: I toys filed credentials as Chairman 9 of the Mining Industry Taxation. Committee of California. 10 I might say that Mr. SearIs has very ably presented the II issues o f the mining industry and the faGt that this whole 12 subject of silicosis or air dust or whatever term may 13 be applied to it is decidedly a subject for more study 14 and for adequate information before any dasisions may 15 be properly made* I same here under the conditions as 16 w e knew them up to last night and a m speaking for as 17 industry which has had scant time to prepare or even 18 knowledge of what it had to prepare for, I was met by 19 the courteous opening of this, by your statement Mr. 20 Commissioner, that you intended to make no findings 21 and that there would be further time granted, but I still 22 feel that, so you may understand somewhat of the lash of 83 past experience under which mining men have labored in 84 their experience with insurance, that I should make a 85 record as briefly as possible of a few of the remarks 26 I have prepared, and I will try to hold myself to the - 37" 1 time you have requested &.& Chairman of the Mining industry Taxation Cessait* 3 tee of California, I a a speaking in the interest of the 4 rainlag industry. This Committee has been formed to 5 combat and cheek unsound taxes and other measures which 6 are or would be improper burdens upon the industry* 7 The Committee already comprises employers of approximately 8 6 ,0 0 0 men, representing wage totals of from |25,00Q to 9 I S O , 000 per day or approximately #0 ,0 0 0 ,0 0 0 to 1 1 1 ,000, 00 10 annually. 11 The greater part of this employement is is localities 12 and districts where if anything occurred to throw these 13 men oat of work there would be no other industries to 14 absorb them. It an be c onserva tively estimated that 15 these 6,000 men directly support in -excess o f 10,000 16 dependents and indirectly contribute largely to the 17 support o f many more thousands engaged in merchandising 18 and other lines of service in the various mining 19 eoiSBunities, 20 The greater part of these men of the mining industry 21 are employed in ore milling and underground mining 22 operations and therefore the proposed insurance surcharges 23 would mesa an Increase in premium cost to the employers 24 of about #3,000 per day, o r an additional cost of more 25 than #1,000,000 annually May it be understood that 26 these figures do sot represent t h e total mining industry <*38- 1 or the total costs, "but they are representative o f the 2 effect on the entire industry in this State 3 The present cost of compensation insurance to mining 4 operators in California is a direct and serious payroll 5 tax which already adversely affeets the volume of labor 6 employed and which, under the proposed surcharges would 7 force many operators either to greatly curtail the volume 8 of their labor or to reduce the rates of wages * or to 9 abandon their operations and discharge their men. There- fef* ': 10 fore, in speaking for the employers of these men, I speak 1 1 also for the men oaployed, for their daily rates of pay 12 and perhaps their very jobs are at stake. 13 Speaking for these employers and these men, I there in fore protest this entire procedure and this hearing, and 15 protest against any increase in insurance rates affecting 16 surface or underground mining or milling for the following 17 definite reasons: 18 1 This hearing has been called and is being held 19 Tiithout proper, adequate or equitable notice to the 20 employers who would b e directly affected by the proposed 21 increase o r surcharges in compensation rates. Mere 22 reference to the classified telephone directory of &an 23 Franc iseo alone would have provided a mailing list of 24 approximately eighty individuals and corporations a25 gaged in mining. They were not advised. 20 2. The purpose of this hearing is n o t clearly o r -39- 23182 7-33 SOM CALIFORNIA STATE PRINTING O F F IC E 1 properly stated, so as to advise the mining industry o f 2 the issue to be met and they are allowed no adequate time 3 to answer 4 3, -Ko facts or experience or proof are advanced 5 or available to warrant any change in rates 6 4* I ht led at the office of the California 7 Inspection Sating Bureau in San Francisco, having 8 obtained a copy o f the notice of this meeting through 9 our own efforts^ it didn't reach me and I a m an operator 10 employing about seventy men and paying an annual 11 compensation insurance rate of around #9,000. I m s 12 there informed at the California Inspection Bating 13 Bureau that the proposed surcharges to he added to the 14 present rates were to be, so far as affecting mining, 15 #11.S3 per |100 of payroll for underground sen* #2.81 16 for surface sen, and #14.04 for ore milling, and that IV these rates had been worked out by the said rating bureau. 18 We submit that it is obviously unfair to hold a 19 hearing affecting a n y industry and at the same time fail 20 to advise that industry of the subject matter of the 21 proposed hearing. So far as this hearing is concerned, 22 the mining industry not having been given that notice, 23 we submit it would, violate the principles of a fair and 24 impartial hearing if any decisive findings were to be 25 made or entered a gainst the mining industry of California 26 as a result of this hearing. It appears t o be the duty, -40- 1 therefore, of the Commiesioner, and at the same time 2 I ish to extend my previous remark that we had the 3 courtesy of his statement that he is going to d o this - r- 4 this is the statement of the industry as it found itself 5 before it some into this meeting - to withhold any 6 decision upon the propriety, need or advisability of any 7 change in compensation insurance rates affecting the 8 mining industry until a properly noticed and properly 9 advised hearing may he had* and with the support and 10 complete cooperation, so that the O o m i s s i o n e r may be 1 1 aided so far as the industry is able in arriving at the 12 proper rates if any change either upward or downward is 13 to b mads. 14 We suggest that this hearing be adjourned for at 15 least thirty days, that in the meantime the California 16 Inspection Bating Bureau and any and all insurance 17 companies, groups or organisations who are interested in 18 this proposed increase in compensation insurance rates 19 shall be required by the Insurance Commissioner to file 20 with h i m full and complete written data setting forth the 2 1 proposed rates, the reasons for such proposals of increase, 22 and definite evidence of loss or other adequate reasons 23 to support and justify such increase: in addition to that, 24 a n allocation of the following charges as included in the 25 1934, 1935 and the proposed 1936 rates should he separate 26 ly sat up for each year: 23182 7-35 .SOM CALIFORNIA STATE' PRINTING O F F I C E 1 (a) Horn file charge. m Acquisition f business. 2 {} Payroll audit charge (4) state and Federal taxes. 3 4 Also these respective amounts chargeable against rate 5 and percentage of rate included in each of the following 6 for 1954 and 1955: 7 (a) Overhead cost. (b) Compensation paid t injured including 8 death benefits. (a) Medical and hospitalization costs. 9 10 For each of the years 1934 and 1935.the following 11 information; 12 (a) On the number o f mines reporting. (b) On the number of men employed. 13 (e) The total payroll reported. |d), The total premium paid. 14 15 When this data is assembled it should be.open to the IS inspection o f the mining industry as individual operators, 17 and through organisations, associations or groups, and 18 then after due notice and m reasonable time has been 19 granted for preparation of answering data or information 20 on behalf of the industry a further hearing should b e 21 held. 22 % submit these suggestions, Mr. Commissioner, in 23 the spirit of justice and proper cooperation. 24 25 26 -42- 23182 7-35 30M CALIFORNIA STATE 1 m mm h o b s representing 2 Empire Star Mines 0., Ltd, 3 MR. HOBS; I think from that dust count yon will 4 hare a bettor ifie'a of what the actual conditions in 5 California underground, sines are than those suggested by 6 Mr, Burbank obtained in Wisconsin f o u n d r i e s f h e brief 7 I have filed contains experience in the operation of 8 Grass ?alley mines over a period of twenty years, and it 9 also has a complete H a t of all possible and identified 10 esses involving silicosis or any lung disease, 11 12 MB. M, .T. BBOGIf representing 13 Governor Bolph*s Committee on Mine Bates.- 14 MB, 8BGCK: Mr, Commissioner, there hr a couple of 15 remarks I would like to have the delegates think over 18 before this afternoon. Mr* Sears stated the fact 17 that those things should be put together and further 18 facts submitted. We all agree on that, but today, with 19 all of the gentlemen throwing the papers on your desk, 20 and looking around this room X find that there are lots 21 of papers to be put. on your desk, if they are left there 22 for future consideration with nobody to take are of 23 them, w e know they w o n 't get much consideration. With 24 all duo respect to you folks, there is a lot of work. I 25 think without a question of doubt that you in your judg- 26 meat will give more time; I think it would be a wonderful 23182 7-33 30M CALIFORNIA STATE PRINTING O F F IC E 1 thing if the raiae owners* the m i n e r s , would appoint a 2 committee of five to have all those things submitted, 3 and they with the help of Mr earls or such able attorney 4 would work them out in the next few weeks together and 5 make a full and complete report on each and very paper 6 that is being submitted today and this report to be for 7 your consideration. How, that samaet be done by 8 u sux as a body, that is impossible. We live all over the 9 State of California. If such a committee was appointed 10 or would work that- could go with you to the Sating Bureau 11 and have the Bating Bureau submit'ihe different facts 12 to them and work it ut so that they at the end o f the 13 time could bring you in a complete report so that you 14 will have everything at the ends of your fingers, I think 15 it would be a wonderful thing, and we will have something 16 to work on. 17 Another thing, to you miners, two or three years 18 ago I spent six months in the legislature in Sacramento* 19 fce only thing I succeeded in doing was spending most 20 of our money. How, the next legislature in January, 21 I hear we are to have a special meeting, you have no one 22 to represent you a t the legislature. We cannot afford to 23 send a very magnificent-crowd to represent you and some- 24 body should b there. The mine owners and miners should 25 take these things into consideration and see if we cannot 26 accomplish something, to have something for the future, -44- 1 somebody to go to and refer your case* 2 3 MB. H. H. PLATE Grass Valley 4 5 ME. PLAT'S: While that comparison between the 6 African mines and California mines is fresh in your 7 memory, while Mr. Burbank was talking - he is. an 8 excellent talker - he made that comparison. It is very 9 unfortunate to do it because there is no comparison 10 whatever. The night before last I talked for a couple 11 of hours with George W* Starr who was manager for 'some 12 of the South African mines for a number of years ant 13 also Of the inspire Mine. He said to ms very definitely, 14 "Of course, you cannot compare the South Africa mines 15 ant their difficulties with silicosis or dust with the 18 California mine* ihore is no comparison, and if the 17 subject is brought up, which I hope it won*t be because 18 there is no comparison, by all means say something 19 because yo u cannot compare the mines in any sense of 20 the wort." I was afraid that possibly Mr* Burbank's 21 remarks would have a serious effect upon your decision 22 on this, but I can well assure you there is absolutely 23 no comparison whatever between the dust of the South 24 African Mines and our California mines. 25 MH. CAEPMTigR: Gentlemen, this has been a very 20 orderly and interesting meeting. I think we will call an -45- 1 adjournment until two o*clock and we will run the 2 hearing as long as you wish after that, or adjourn it 3 to a future date* I want to give everybody an oppor4 tunity to be heard that is here today We will adjourn 5 until two o'clock* 6 7 8 9 ' FRIDAY, WOTOMSSR 15, 1935, YWQ O'CLOCK* P, ft* 10 11 (Meeting called to order by Mr* Carpenter) 12 13 MB. CAHF'M^SR: it the morning session I understood 14 we had heard from all the representatives of the mining 15 classification who wish to be heard at this t i m e , .T his 18 afternoon we are going to start off with representatives 17 of organised labor. Do you want to talk for them, Mr. 18 Sbharrenburg? 19 MR. PAUL SCHARREMBtJBG 20 , Secretary, California State Federation of Labor. 21 22 MB. SGH&RHSKBURG: Mr. Commissioner and Gentlemen: 23 'hen we learned about the meeting called here today we 24 prepared a letter which is in. your possession and which 25 i will briefly review, 26 fhe State Federation of Labor is an organization or 2 3 1 8 2 7 - 3 3 SOM CI. IFOR N i A STATE PRIHTIHG O F F IC E 1 federation of all labor unions in the state including 2 miners and m e t a l workers and so forth, and. our principal 3 function is along legislative linos. As one of the 4 spokesman of the California State Federation of Labor 5 I desire to protest, most energetically and emphatically 6 against the adoption of the schedule submitted by Mr. 7 Burbank and his associates. 8 We insist that the requested surcharge rate is not 9 the result of an ascertained and proven silicosis 10 experience but rather, as has been intimated here this 11 morning, has b een gathered up haphazardly from Wisconsin 12 and South Africa, We submit there are more valuable 13 sources of information available than those submitted by 14 M r . Burbank. Id We call your attention to the fact that the State 16 Compensation Insurance Fund has been able to meet 17 profitably not only the current costs of silicosis cases 18 but also cases that have accumulated for twenty years 19 past. Notwithstanding this additional burden, the State 20 Compensation Insurance Fund, doing one-third of the 21 compensation insurance business of California, which 22 claims it operates on a cost of 15.64$ of its premiums, 23 rebated to its policy holders an approximate 20$ profit. 24 On February 20 of this year the State Compensation Insu- 25 ranee i'und released this statement, and while it is a 26 little lengthy, I think it has a direct bearing on the -47*  23182 7-35 SOM CALIFORNIA STATE PRINTING O F F IC E 1 situation, confronting you. 2 burg read the following: ) (Whereupon Mr. 3 cbarren- 3 "The Premium Income for 1934 totaled #508,792, 4 an increase of fi,384,981 or 33$ oror 1933 Approxi mately twenty-six thousand employers patronise the 5 Fund, or one-third of the insured payroll in the State, While the new business written increased materially, . 6 a substantial portion of this gain is due to the Improvement in business conditions throughout th State 7 during the past year, * 8 ''The amount returned to policy holders during 1934 as dividends totaled #831,605. ffeis is in excess of 9 20$ of the premiums on the policies on which dividends have been allowed and. represents a direct saving to 10 employers. The expenses for 1934 were 15.94:1 of the premiums, a substantial reduction over the last two 11 years; this will further increase the savings returned to policy holders, 12 "The financial position of the.fund is now the 13 host in its history. The Fund has admitted assets totaling #9,452,550, which is an increase of 14 #1,432,996, and is the largest ever-held by the Fund, The assets are represented principally by cash of 15 #1,017,566, U. 8. Treasury jfbtes. of f766,562, and bonds of 17,261,068 Only those bonds which are legal 18 for savings banks in California are purchased by the Fund, 17 "The reserve set aside for future payments of 18 compensation benefits to injured employees was increased during the year to $5,870,241, It is not generally 19 known that under,the California Law an employee who is permanently and totally disabled receives a pension for 20 life, The Fund has two claimants who, as e. result of injuries in 1914, are still receiving compensation; one 21 who was Injured in 1915, three in 1916, and six in 1917. Unless otherwise ordered by the Industrial Accident 22 Commission, all claims are paid as wages during the period of disability, or in the event of death, the 23 widow or other dependents receive benefits spread over a period of 240 weeks, 24 "The reserve of $5,870,241 is amply sufficient to 25 pay all deferred benefits to injured workers and their dependents, 26 "The Fund is one of the largest taxpayers in the --48-- .23182 7 .3 5 30M CALIFORNIA STATE PRHJTl N O F F IC E 1 State o f California, It is taxed on the same basis as a private Insurance company* Over #2,000,000 has been 2 paid in taxes to the State as the result of th insurance business transacted b y the Fund., The Fund is 3 not subsidized by the state in any way, paying rent for its offiee quarters, telephone service, and for all 4 other items of expense usually furnished other State Departments*: 5 "he F u n d 's surplus increased #24,400 during the 6 year to total of '#1,905,346. 7 "This surplus and the adequate reserves invested in high grad securities are evidence of the F u a d 's 8 financial ability to meet all its obligations to policy holders and their employees, and to meet any contingency 9 which may arise. 10 We call your attention also to the fact that the 11 privately owned and conducted compensation insurance 12 carriers, who charge against each premium dollar paid to 13 them 40.6$ for overhead and operating expenses,, also were 14 able to meet their silicosis losses and still operate at 15 a profit. In fact, some of the private insurance com16 pan!es' business was so profitable that they rebated to 17 their policy holders from 15$ to 20$ of the premium 18 dollar. 19 t call your attention to the persistent report 20 that the insurance companies know that it will be 21 impossible for you to approve their proposed silicosis sur- 22 charge which proposes an increase of from 100$ to almost 23 1000$ upon California Industries. 24 If the State Compensation Insurance Fund has met not 25 only the cost of present silicosis eases but also has 26 been able to meet the accumulation of twenty years' ili- 4 23182 7-33 30M CALIFORNIA STATE PRINTING O F F I C E 1 eosis cases which were recently charged to it, and is 2 able to show a 20% profit on the present manual rates of 3 the California Inspection Sating Bureau, how can the 4 proposed silicosis surcharge rates of the California 5 Inspection Sating Bureau of from 100% to 1000% he 6 explained or Justified. 7 Labor of the State of California is unalterably 8 opposed to exorbitant rates that will ruin California 9 industries and throw thousands of men out of employment. 10 We eit for example the California Inspection Bating 11 Bureau's classification of "marble and stone cutting and 12'; polishing," with a present manual rate of 2.55, and in 13 which industry the California Inspection Bating Bureau 14 requests your approval of a "silicosis surcharge o f 15 25.25." This is a request for a surcharge increase 18 of 990.59%, or almost 1000% increase. 17 We insist that the California Inspection Rating 18 Bureau cannot produce proofs justifying this impossible 19 rate. The request of the California Inspection Rating 20 Bureau for your approval of silieosis surcharges is 21 replete with similar excessive rates. 22 w assume that because of the tremendous and far 23 reaching importance of your decision that the meeting of 24 today sill be but a preliminary meeting, and we trust 25 very earnestly that we will be given an opportunity to 26 analyze carefully the data and material submitted by Mr. *50- 1 Burbank and his associates so that we can come hack at 2 a future date and assist you in digesting and analyzing 3 whatever they have, and in 'conclusion I would like to 4 say this, that there are some things in California, 5 notwithstanding the industrial wars we seem to have fro 6 day to day, upon which we can cooperate, and one of 7 those is before us. 8 Instead of talking about rates, we should talk about 9 prevention of silicosis dust troubles* I am sorry t 10 have to say that labor has not had the whole-hearted 11 cooperation of industry in that prevention work* For 12 example, a few years ago labor in California attempted 13 to induce the California legislature to pass legislation 14 preventing cement dust f rom flying around in the holds 15 of ships. We didn* t get away with it because industry 16 was united and there were doctors produced who told us 17 it was healthy for us to inhale cement dust, and that 18 is how it was. However, after two years they did adopt 19 a paper back cement bag, 20 a.t the last legislature there was a bill initiated 21 by Hr, Brennan of Ban Francisco providing for better 22 sanitation* The bill passed the Assembly in good for 23 and when it got to the Senate I was looking around for 24 some assistance and none of yo u gentlemen were there to 25 give us a boost, and before the Senate got through with 26 with the bill it m s a little bit worse than when it - 51- 1 started in the Assembly* 2 1 submit to yon earnestly, not in the spirit of / 3 sarcasm, that we aan cooperate in those isatters* We M- 4 can prerent the death of men who want to lire. It has / 5 been done elsewhere, it has been done to a certain 6 degree in California where you h a v e n 't gone far enough. 7 Another thing is to give credit to those employers, to 8 those corporations that go just a little hit further than 9 the law provides. I think it is very unfair to penalize 10 the employer who puts his mosey in a. blower system and 11 pays the same rate as the employer who does not and who 12 says, 4fI d o n 't give a damn, I am insured.st It is the same 13 as if a man driving an automobile is careless about his 14 driving and says, "1 d o n 't give a damn, I am insured.1' 15 U p o n that point, I trust, so far as it may be in 18 your power, that there may be a credit or rebating 17 system to those employers who do put some money Into 18 prevention, adversely applying to those who do not. 19 I would like to call your attention to the fact 20 that the legislature has appointed a committee, rather 21 the lower house, the Assembly, with specific direction 22 to study that matter. Senator Malone was here this 23 morning, and that committee will furnish valuable data 24 on that subject matter. 25 ^hat is all I want t o say at this time. I think 26 the private carriers are gradually taking themselves out 52- 23182 7-3.5 SOM CALIFORNIA STATE PRINTING O F F IC E 1 of business. Many of them are high class fellows and 2 are friends of mine, but for some years past there has 3 been a campaign in California to make the State 4 Compensation Fund a monopoly* and if our private 5 insurance carriers keep up this line of attack 1 think 6 the time will come, when they won't have any business left. 7 There are some gentlemen present who have some 8 information* particularly Mr, Brown of the Moulder's 9 Unions X think he can explain about the mill work and 10 metal shops *. * . 11 12 MR, i m m SHOWN Secretary 13 International Moulders'Union of North America 14 15 MR BROWN: Mr, Commissioner and Gentlemen: M y 18 name is Frank Brown and X represent the Moulders' Union 17 of North America. That is an organisation of which 18 organised foundry employees are members. I a m not' going 19 to enter into* for the sake of time* any preliminaries 30 such as stating our interest and so forth Naturally 21 we are very Vitaliy interested in any factor connected 22 with employment or unemployment. 23 If these exorbitant rates* or even any kind of a 24 sizable increase goes into effect on compensation 25 insurance, it is going t o tend to drive the foundry 26 business out of the State of Oaliforsia thereby reducing -- 53- 23182 7 -3S 30M CALIFORNIA STATE PRINTING O F F I C E 1 the employment for our members, for the foundry workers 2 in the State of California. 3 I listened very attentively to the very able 4 presentation made this morning by Mr Burbank fhe 5 deduction I are- from the reasons why these surcharges are proposed 6 in compensation rates for foundries in Oalifernia/was 7 because of a condition in the-State of Wisconsin, in 8 other words, the study of silieosis in the State of 9 Wisconsin. I don't know why that would be considered 4 1 10 a factor in a n y way inasmuch as that has absolutely no 11 bearing whatsoever on the foundry industry or the 12 conditions pertaining to the foundry industry in the 13 State o f California. There is an altogether different 14 condition prevailing in that state and I might state I 15 worked actively in the trade of moulding for over twenty- 1 two years in nearly every state that has foundries in 17 the United States and a m fairly familiar with the condi- 18 tions in Wisconsin. 19 How, in Wisconsin there is a different climatic 20 condition. A s everybody knows, that is a very rigorous 21 climate. It is otherwise in the State of California, 22 For about six o r seven months of the year in the State of Wisconsin the foundries have to be closed; there is 24 practically no ventilation in them. It is otherwise ia 25 California. *^he foundries here are ventilated for 26 practically twelve months ia the year, -54- 231B2 7-35 30M CALIFORNIA STATE PRINTING O F F I C E 1 Another factor is that Milwaukee, which is the 2 principal and in fact it is quite a foundry center* Is 3 the principal foundry center cf the State of Wisconsin - 4 in the Oity of Milwaukee until recently - I do n 't tact? 5 if that condition is changed right now*-* it has been the 6 eustom to work sixty hours a week, `% a t has been the 7 minimum hours worked in a majority of the foundries in 8 the Oity cf Milwaukee, ^he maximum hours hare in 9 California have been forty and forty-four hours, and 10 sixty hours was not the maximum ia Milwaukee* 11 It is very self-evident the effect that is going to 13 have on workers' health. Naturally their resistance 13 is broken down and they are moae susceptible to any kind 14 of disease. 15 That is not so in the State of California. Now* 16 the condition hers is absolutely different than it is 17 ia .the State of Wisconsin. W are not concerned with 18 Wisconsin, because the condition that we are dealing with 19 is here in California, and I say advisedly, and from an 20 experience dating- over fresa about 1898, that in the 21 jobbing and machinery foundries of California I invite 22 the closest investigation and survey t o be made, that 23 there isn't a silicosis existing in the jobbing and 24 machinery foundries la the Stats of California, it is 25 absolutely non-existent. 26 fhe organization which I represent is called an -55- 23 t M 7-35 SOM CALIFORNIA STATE PRINTING O F F I C E 1 organization of old men. It baa always been considered 2 a particularly healthy trade Men from our organization 3 have obtained prominence in boxing, baseball and other 4 sports that require a m a n to be in the finest of physical 5 condition, and it doesn't exist in the State of California 6 regardless of whether or not it does in the State of 7 Wisconsin. 8 How, if studies are made in other states, X should 9 imagine that these studies would be made where the' 10 conditions are more nearly similar, that is, where the 11 same number of hours are worked and the same type of 12 foundries exist. How, there was s surrey made, conducted 13 fey the Industrial Department of the Brooklyn Chamber of 14 Commerce, and I just want to read an exerpt: (Beading) 15 "We hay'made a careful study of conditions in the twelve foundries in Greater New York that are now 1 operating. The results of this investigation show that silicosis is practically aon-existent. At the present 17 time we have 546 productive employes in our foundries. This is exclusive of clerical help* forty-four employes l have been in the foundry .industry from 1 to 5 years; 45 from 5 to 10 years; 65 from 10 to 15 years; 95 from 19 15 to 20 years; 79 from 20 to 25 years; 59 from 25 to 50 years; and 165 for 30 years or more. The average 20 ages for these groups are as follows: 21 1 to 5 years - 29.7 years 5 to 10 " 33.5 " 22 10 to 15 * - 38*7 H 15 to 20 '* - 42.1 * 23 2G to 2S " - 43.4 " 25 to 30 " - 48 24 30 or more" - 54.7 " 25 A glance at these figures will immediately disclose that 29.8 per cent of our employes have been working in <db the foundry industry for 30 years or more." - 56- 23182 7-35 30M CALIFORNIA STATE 1 It states there v e r y emphatically there Is b 't any 2 and hasn't been any silicosis, that silicosis is non- 3 existent, 4 How, there have been a few eases* I -helleve five 5 is the exaet number, developed in the foundries conducted 6 b y the stove laairafaeturers In the Bay District hers. 7 Mow, I believe the embers of our organisation are fairly 8 intelligent. They realise that the most priceless 9 possession of a human being is health; there is nothing 10 any more priceless than that. hen this matter of 11 silicosis eaa up* when cases developed in the stove 12 foundries, they immediately tried to find out the reason 13 for this in order that it be eliminated, not for the few 14 pieces of silver that we might collect as compensation 15 but as a safeguard to their health, the y determined th 16 reason for silicosis in stove foundries or in any other 17 foundry was that they use s substance called parting or 18 partingmoll. It Is shaken on but is used as a parting 19 as the name indicates. Mow, one o f the ingredients of 20 that was silica. Silica was an ingredient. There wasn't 21 any silicosis in stove foundries before they commenced 22 to use that. Naturally that was alimiaated, and I might 23 say that as far as the foundry industry is concerned in 24 this particular district, w have had the closest so- 25 operation from the manufacturers and the found.ryaen, 26 Blow, the parting and partingmoll which included In its 57- 1 s a t o g the substance of* silica, that has been eliminated 2 and the parting and partingmoll used non is absolutely 3 free of silica. 4 lion in this, one of the eozmauni cat ions that carae to 5 my attention, 'it states silica grinding, that is. the e classification of silica grinding, there is a surcharge 7 o f 188*07 Shy? Because the name is silicosis* They 8 say that silica on the lungs is the reason for that, 9 That is the only substance used around foundries that 10 has. silica in it and that has been eliminated, While 1 1 there have been a few case. developed in the foundries 12 conducted by the stove manufacturers, the cause has been 13 found, it has beep eliminated, and I am absolutely 14 p&sihive silicosis is stamped out in the stove foundries, i 15 in the foundries conducted by the stove manuf actnr era 16 of the State of California. 17 How, the reason given by Mr* Burbank this morning 18 for this raise in cost, or any raise in cost, is to meet 19 the cost f the particular hazard. Those were his exact 20 words* How, if there is no hazard, i f there is no 21 hazard, why should there be a single cent, why should 22 there he a single cent added to the cost of compensation. 23 I ash that* If I believed, representing the men 24 employed in the foundry industry, that there was a real 25 hazard, that they su.ld have to have money there to meet 26 the eases that earns up, why 1 would fee absolutely in favor 1 of a reasonable rat being charged, but there is no 2 hazard and we believe, in fact, e are absolutely 3 opposed to .any raise whatsoever, the slightest raise 4 even, 5 Sow, to show what the members of the organization 6 which I represent think of this, Ihey have had meetings 7 o n it and they are absolutely willing t waive any claim 8 to compensation for silicosis. Why should they? it is 9 like giving away tfe sleeves on your vest, because they 10 feel there wan*t be any oases, there c n ,'t be any eases 11 coming u p and there w o a ?t b@ any claims, so, they are 12 willing to waive that. 13 In conclusin, Mr. Commissioner and gentleman, you 14 can talk volumes on this, but -I am going to conclude 15 Yery soon. I want to state this, at this is spread over l all the employees of -a foundry, all the employees of the 17 stove manufacturer, to show you the ridiculousness of it - 18 quite a large percentage of employees of the foundry 19 work in the yard all day long; they are breathing the . 20 good old o zone, and there is no healthier work in the 21 world than they are doing. Nevertheless they would put 22 this surcharge on those me n who breathe nothing but good 23 air- in the eight hours they work, men who a r c not even 24 in the building. ::r Our organization pays a death benefit and naturally 26 the member that passes away has to file a certificate -59- ! 1 showing the cause-of death. Going over the records for 2 the last twenty-five years, they have been particularly 3 free o f any hind of chest complaint, that is, members 4 dying of pulmonary or chest complaint. I believe the 5 foundry industry is a n industry that is just about as 6 free o f that particular complaint as. any industry, so why 7 there is any reason for this surcharge is something that 8 we do not understand, Mr* Gommissloner, and we protest it 9 absolutely. 10 11 MR. J O M A* G 'GQMflLL Secretary, 12 The San Francisco Labor Council. 13 14 MR. 0 'C03ISLL: Mr. Commissioner and Gentlemen: 15 Without reiterating what was said already, I want to say 16 amen to what Mr. Searls said this morning, Xn&fce m i n , 17 I want to take this opportunity of making a few obser- 18 vations on the statements made by m y good friend Ban 19 Burbank* I want to say in passing that he learned what 20 he knows about the insurance racket from his employment 21 with the State Fund. 22 Having to do with industry generally here in San i 23 Francisco, being secretary of the San Francisco labor 24 Council embracing fifty or sixty thousand m e n and women, 25 I think I ought to know something about the activities 26 of the Insurance carriers because part of our work, a good -30- 1 part of it, is in defending our helpless felloes who 2 are unfortunate enough to get hurt in industry and. it 3 isn't a fight generally with this Industrial Accident 4 Commission hut with the private carrier* Men are being 5 ordered bach to work - some c a n 't walk and some can't 6 see - through the philanthropic efforts of these insurance 7 carriers in telling us how good they are to save our 8 people. 'ihey also suggested that we might practice a 9 little good housekeeping and put in some of the safety 10 appliances to prevent the things that are being complained 11 of, as a reason for the increase in. these rates. 12 Why, gentlemen, let me say this to you. Every 13 two years we have been there at Sacramento; I have been 14 there for thirty years;, and everything we have intro- 15 dmeed of that character, very piece of hunaane legislation * 16 and. even Governor Johnson, the most humane governor we have 17 had, has been criticised, if you please, for appropriating 18 money to establish the State fund - every piece of hua&st 19 tarian legislation we have today for the prevention of 20 accident, w have the insurance carriers opposing every 21 one of those deals. As Mr.Seharrenberg said, on one 22 occasion they brought doctors up there to tell us how 23 healthy cement was for us, bow you should built up a fine 24 house of plaster, I suppose, around your ribs. 25 At this particular case in the last session, that is 26 why this hearing is being held today, they were disappoint 1 at not passing a 'piece of legislation to bring about a 2 statute of limitations on this silicosis and, tuberculosis, 3 when be admitted himself this morning that it took in the 4 neighborhood of twenty years for this disease to develop;. 5 Still they wanted to liait it to a period of seven years 6 and six months to make application should the thing ensue 7 and take `place. 8 And I found out there is a real Santa Glaus in our 9 midst, The insurance carriers are going to operate with10 out profit* In the words of Will Bogors, "There is 1 1 another funny ne.'* I a m not going to reiterate, b u t I 12 say we are opposed to this because it is going to make 13 all of you fellows sitting out there retrench and we know 14 where you always do it* by cutting wages, and we are 15 going to resist that to the last ditch. We are not going 16 to let you do it and will try to prevent the so-called 17 Moses in our midst who are going to try to add this 18 added expense to the cost of your doing business. We 19 will try to induce t h e g ood Commisiioner not to see it 20 in their wa y and leave y o u alone, Tou have a tough enough 21 time now competing with labor all over the world in sell- 22 ing your wares and your goods throughout the State of 23 California and these United States- and we do n 't want to 24 bring about that condition of making Chinamen out of 25 the people of the State of California. God knows you 26 have enough to do trying to stay in business without a - 62- 1 23132 7-3S 30M CALIFORNIA STATE PRINTING O F F I C E 1 adding 1 and 14$ and in some cases sore than 900$ to 2 year expense* 3 I wis h you godspeed, the whole damned erod'd of you* 4 5 s m b * c * t, m o w General Vice President, 7 International Association of Machinists* 8 9 MR, SHOW: Mr. Commissioner, Gentle and -Friends: 10 la dealing from s practical ant constructive standpoint 11 of this proposed increase la the rates for Insurance, I 12 have for a number of years b m n very deeply interested 1 3 in insurance for unfortunate workers who were the 14 victims o f industrial, loss sad accident in the industries 15 not only f the State o f California hut throughout the 16 United States. 17 I of labor have done everything humanly possible to 18 develop legislation for the protection of these unfor- .suffer 19 toast men and whmes who/beeause o f certain conditions 20 such as obtain in the industry of the State o f California. 21 For a number of years we have endeavored to do everything 22 humanly possible for the prevention of industrial ills, 23 accidents and sickness. e have made some progress but p4 not to the degree that we desire because we feel that 25 prevention Is by tat the greater correction than to 26 insure and pay compensation to the unfortunate victims -S3. 23182 7-35 30M CALIFORNIA STATE 1 who become ill or have accidents befall them. 2 Mow, is. dealing with this particular problem of the 3 increase in the rates it is going to bring an added 4 hardship to the industries of the State o f California. 5 We feel that the increase is absolutely unjustified 6 and the motive is to increase the income of the 7 insurance companies in the state and disregard the 8 fundamental issues involved in this proposed increase, 9 a burden upon industry* k further burden upon industry 10 through the increase in insurance is absolutely usjusti ll tied. 12 We feel that any justification whatsoever in the 13 increase of insurance or any other rates or anything that / * 14 -would farther burden industry should be given up to the 15 people who are th investors and the managers of industry 16 and the workers wh in a measure will have to meet the 17 burden of this proposed increase. Before a survey which 18 would he justifiable is made, and a complete one giving 19 to the employer to labor and to the people of the State t 20 y California an opportunity/ssan very carefully the 21 business that has been developed, the cost of this 22 insurance sad every other factor entering into it, I 23 believe we should not at any time consider anything of 24 this character whatsoever until the people have had am 25 opportunity of making a complete survey and bringing in 26 an intelligent report, and we of labor know that in the 23182 7-35 30M CALIFORNIA STATE PRINTING O F F I C E 1 last analysis, a presented by Brothers 0*Connell and 2 Seharrenburg and others, m you know, as a result .of the 3 increased burden financially and otherwise to the Indus- 4 tries- of the State of California, that labor in partieular 5 is bemad and usually pays the snarer portion of these 6 increases 7 So, in conclusion, just this: I a m amazed and 8 astounded that a' proposal o f this kind would he submitted 9 at this time in view of the statements made, public state- 10 seats in the press, stating the amount of business and the 11 profits made; as our old senator and governor.of the 12 state of California said in addressing the senate of the 13 halted States when a certain measure was presented, that 14 he was also amazed and astounded and he couldn't find 15 words to express himself as covering this measure so 16 h o had to go into the dictionary very deeply and 17 ooalda1t find the word there, but finally his memory 18 carried h i b a c k to he Lincoln who also at one time 19 h a d set an important problem and the word was' coined b y 20 h i m - he said, ?,fhis is a n a stonishsr." 21 22 MB C A B P M T E R : We will now continue with some of 23 the industries represented here today. I believe there 24 are representatives of various types of foundries here, 25 26 65* 1 MR. Ca BROLL 3., STII3? representing Metal Trades Manufacturers Assocition and Association of Southern California Gray Iron Founders Society* 4 5 MR* SI1S0H; Mi-* Commissioner and Gentlemen; I 6 -would like to state that it is indeed a pleasure to Mire 7 the opportunity, -at least in one thing as important as 8 this is, to agree with Mr* Sebarrenburg with whom .we 9 very often, differ is industrial matters. He has hit the 10 nail o s the head when he said here is a situation regard- 11 less .of labor disputes that we an cooperate on* 13 There is absolutely no justice, in my opinion, 13 in. comparing a foundry in Milwaukee with one in Califor- 14 nia. As stated b y Mr, Brown, it is prefeetly obvious 15 that conditions, climatically, particularly, are vastly 16 different in Southern California, We are making an 17 effort to eliminate the dust hazards; w e are putting in 18 blowing machines, we are wetting the floors and letting 19 the fresh air in* 20 Just one other point and then I conclude* I think 21 the carriers are overlooking one very important item. 22 Frankly, the carriers do n 't care at the present time 23 particularly about carrying compensation insurance. The 24 real insurance that they want is that less hazardous 25 sueh as automobile insurance, fire insurance and lisbili- 26 ty insurance, and very often they take compensation 23182 7-35 30M CALIFORNIA STATE PRINTING O F F I C E 1 insurance along Tilth it because they have to, not b@esu.se 2 they sent to. 3 Gentlemen, let me say to you very seriously along 4 the lines these gentlemen have stated, that if these 5 rates as now promulgated were to go into effect, there 6 would be a lot less insurance in ail lines in California 7 for the reason that many industries 'will be put out of 8 business and many, many men thrown out of employment. 9 Mr. Commissioner, finally, let sie beg of you, 10 d o n ft some to any conclusion at this time hut give us 11 further opportunity to submit to yo u facts, reasons and 12 data why these rates as now promulgated should not be 13 put into force. Thanks. 14 15 MR. G&WPWTW: We have three letters here from the 16 Gray Iron foundry Association of Northern California 17 certifying Mr. herr, Mr. Henderson and Mr. Moah. 18 19 ME. A m m 3, O R E representing 20 Gray Iron foundry Association of northern California 21 22 ME. EIRE: Mr, Commissioner and Gentlemens I have 23 been identified v?ith the foundry industry since I was 24 knee high to a grasshopper. In fact, I have been in the 25 industry since I was nineteen and I a m fifty-three years 26 old today. I have aeon during that time many moulders - 67- 23182 7-35 SOM CALIFORNIA STATE PRINTING O F F IC E 1 coae ana go and I aia trank to say* as far as th 2 industry Is aonaar-hed, it has been always locked upon as 3 one of the most healthful occupations in industry, 4 These five cases mentioned a while ago are eases 5 that developed in the last two or three years, Some I 6 think are doubtful, too, as well, although I am not 7 certain on that score, hut the industry as a whole is an 8 industry that has been free from troubles of that kind* 9 . Sow* we re not unsympathetic to the poor unfortunate 10 who has met with a misfortune of this kind, but on the 11 other hand you cannot expect to put on the industry 12 a burden such as proposed by our good friend here. In 13 our business it would mean an additional #24,000 a year, 14 and that is no small sum for a,.moderately small concern, 15 and if these rates are put into effect, a s Mr* O 'Gonnell 16 and Mr* Seuarrenburg have said, we would hang the crepe 17 on the door and go out of business before the sheriff 18 gets us, because it couldn't be passed onto the public, 19 These are conditions that face other lines of 20 industry as well and I believe when ,|r. Frank Brown 21 came up and made his statement, and Mr* John G 'Connell 22 and Mr* Soharrenburg, they were speaking in all sincerity 23 as to what conditions prevail in industry and what the 24 rates mean to us. I believe every consideration should be given to 26 this over a period of time before you serve the industry  23102 7-3S 30M ' CALIFORNIA STATE PRINTING 0 F F IC E 1 with a condition of affairs that would certainly mean 2 ruin to most of ue if \?e attempt to keep in business. 3 Again, 1 want to caution you all not to jump into 4 this thing in a haphazard way, 5 6 MR. ARPHT1R: We have a letter from the last 7 Bay FoundrymenTs Association informing us that Mr,. 8 SfeMs&t M*. Welsh and Mr. S. D* Bussell are accredited 9 to represent the organisation. Is either one of those 10 gentlemen present and desires to be heard? . 11 12 mu m m m m. welch . 13 representing East Bay Foundrymen* s Associ at ion 14 15 Wdm ItBLCH: Mr. Commissioner, it was m y intention 16 to enlarge upon the remarks of Frank Brown in making 17 a comparison of conditions as exist in California and as 18 exist in Wisconsin or any other eastern states. There 19 really is no comparison. 20 Like' many other industries, it is possible that 21 the foundry industry m ay have been lax until the last 22 five or six years, but as you go around and visit a great 23 many of the foundries you will find that steps have 24 been taken to remedy all dust conditions. I think that 25 is true, exceptionally true, in many of the foundries 26 both in northern and southern California. I can very -59- 23182 7-35 SOM CALIFORNIA STATE PRINTING O F F IC E 1 authoritatively state of ay own company that we have 2 expended in excess of #300,000 in the past four years in 3 consideration, of ,the welfare and comfort of our 4 employees while we don't know definitely the extent 5 of the foundry payroll, it is well in excess of six or 6 seven million, dollars a year in the State of California 7 -Vi realize very appreciably that our competition is as 8 keen, not only in foreign but a-s wall/in our bordering 9 states* h8 feel that to have these surcharge rates go 10 into effect would be absolutely ruinous to the foundry 11 industry in the State of California, 12 thought is being expressed b y a great many of 13 the foundrymen if they can carry on under existing rates 14 and improve-,' s o M i tions for the welfare of their 15 employees they would be accomplishing a great deal, 16 more,.than could be otherwise dons, sad we particularly 17 beg of you not to consider this recommendation at this 18 time, 19 20 MB* G&MFMTm; ho have another letter stating that 21 Mr* Mainzer representing the Hon Ferrous Foundry 22 Association, and Mr* George Kennard representing the 23 Pacific Coast Founders .ssooietion, will speak for those 24 Associations, 25 26 -70- 1 ME. F, A* MAINZ1R representing 2 MGE FIBROUS FOUNDRY ASSOCIATION 3 4 ME* MWZlH: There is nothing I have t say that 5 has not been eovered, particularly in view of future 6 dealings* 7 MR. GSQBGI 1 E D 8 representing pacific coast m m m association 9 10 MS* E M H A 1 B : I same here with a good many ideas 11 in ay head to express, but as they have already been 12 expressed I have nothing farther to add to what has 13 already been said. 14 15 MR. GARP'MTER: Anyone else in the foundry industry 16 desiring to be heard at this time? If not, we will 17 pass a. There are a number of representatives of the 18 cement industry her today* I have a letter stating 19 that Mr. Herbert Clark of Saa Francisco* Mr* Geo* f. J. 20 Prince, Jr. of Los Angeles, and Mr,/HaroId pragin of 21 Los Angeles, will represent that industry. 22 MR, GUO. r.v, PRIMOK, JR. 23 representing Cement Industry. 24 25 MR. PRIMO 1: I Just want to say a word or two at 26 this time. Due to the fact that the notioe was rather -71- 23192 7-35 30M CALIFORNIA STATE PRINTING O F F I C E 1 short, we have not prepared the data which we will present 2 later on in connection with the problem of silicosis in 3 the cement industry. 4 Frankly, we are all of the opinion that there is 5 no silicosis risk in the cement industry and we are going 6 to gather data from which wo will prove that to he the 7 case. 8 hls whole problem which is before us at this time 9 gentlemen, is a very serions one and one that has been 10 ably presented by our friends in the labor group and the 11 men representing other industries, which points to the 12 fact that we are taking a step which has serious eon- 13 sequences unless it is correctly taken, and I k n o w that 14 the Commissioner appreciates that from the attitude fee 15 has taken in this whole problem in his kindly consenting 16 to a continuance of this meeting so that we ay all have 17 a chance to go fully into the whole problem from various 18 industries which are affected or are to he affected, 19 and f rom that standpoint give h i m all the .data with 20 which they m y be squarely faced and what we m y determine 21 and what increase if any may have to he made in connection 22 with any industries on this whole silicosis problem. 23 i sincerely hope that the Commissioner will give 24 due consideration to the request made by a number of 25 groups hers today for a substantial continuance, I would 26 suggest at least a three months* continuance so feat w e -7 2 - 23182 7-35 30M CALIFORNIA STATE 1 may gather for him and for the Bureau information from 2 which. we can determine one and for all and settle this 3 whole problem Thanh you, .Mr. C o m i s s Inner. 4 5 MB, Q&BPMTIR: Anyone else representing the cement 6 industry that would like to he heard at this timet If 7 not, for the benefit of our reporter here and some of 8 you I think we will declare a recess for about ten minutes 9 and recoYiVena at three ten* ' 10 11 (Ten minutes recsss} 12 13 MB. CAHPKftTBR; The Clay Products Industries - there 14 are quite a number representing a great deal o f the pay- 15 roll Involved la this question of surcharge. I a m going 16 to ask .the representatives of the Olay Products Industries 17 to talk at this time. I understand Mr. -J. J. Stein is 18 here and would like to be heard* MR, 19 J. J. STEIU 20 Executive Secretary Olay Products Institute 21 22 M r . S T U M : Mr, Commissioner, my same is 3. 3. Stein, 23 Executive Secretary of the Olay Products Insilute. ' I 24 represent eighteen clay products manufacturers in southern 25 California. is have adopted certain resolutions is 26 connection with these proposed surcharges bat we under- -73- 23(52 7-35 3QM CALIFORNIA STATE PRINTING O F F I C E 1 staad frost the Gommlssioner that a further hearing will 2 be held in Los Angeles so that we feel satisfied that with 3 sufficient time being granted as we will be able to secure 4 same date to further our protest, 5 fhere are only, one or two points I would like 6 to make at this time, one being in the Tent the hearing 7 is held in Los Angeles that at least ninety days be 8 granted ear industry to prepare the necessary data, $e 9 are vitally concerned with this measure and it will take 10 us at least that long to prepare our-ease. 1 would, like 11 to suggest that when the hearing is held in Los Angeles 12 that the Commissioner arrange for each interested industry 13 to have the maximum amount of time for the hearing. We 14 received our notice just two days before we had to appear 15 up here, and we hope when the continued hearing is held 16 is Los Angeles the maximum time will be afforded each 17 industry *e would like to have ninety days, 18 Just one more point, A great many phases of this 19 problem have been discussed but I h a v e n 't heard anything as to the probable effect on local industry if these 21 surcharges go into effect. Our industries are in compe 22 tition with neighboring states where- such charges are not 23 involved, and we feel it would be quite a handicap, to 24 local manufacturers to have to take care of these sur 25 charges where our competitors in neighboring states do 26 not have that problem. - ? 4- 2 3 t9 2 7-3 S 30 M CALIFORNIA STATE. PRINTING O F F IC E 1 There are other m e n 'f r o m the Clay Products industry 2 who have other phases to discuss, ^hat is all I have at 3 this time. 4 . MR. B. CARS Ties President 5 Gladding Mclean Company 6 7 Ml. CAKE: I represent Cladding leftan Company who. 8 operate six plants in southern and central California. 9 W want to join with other Industries in southern 10 California is requesting a continuance of the hearing o f 11 this matter to he held in Los Angeles at a date not earlier 12 than ninety days in which w may hare time to prepare the 13 factual information that w e will present at that time. 14 There are one or two things I would like to point 15 out in connection with the surcharge proposed, the sur- 16 charge rates as they apply to the clay industry. 17 First of all, it is a conceded fact hy the medical 18 fraternity that silicosis* the angle of this matter in 19 which we are generally interested, is caused as a direct 20 result of direct inhalation of free silica dust. While 21 we wish to vigorously protest the surcharge rates in 22 general covering- the Clay industry, believing that they 23 are not equitable and just, based on the experience 24 rating, I would like to point out at this time certain 25 phases of the matter, namely, that in the manufacture 26 of clay products such as terra cotta brick and products - 75- 23182 r-as s o m CALIFORNIA STATE PRINTING O F F l i e 1 of that type it is a very well known and established 2 fact that free allies content of the ingredients which 3 sake up these products contain from 10 to a maximum of 4 ZS$ free silica* These, however, have been-placed in 5 the same classification, so far as surtax charges are 6 concerned, with silica brick manufacture, the.ingredient 7 of which is at least 97$ free silica. Likewise, the 8 surcharge rates are similar to those of pottery and 9 earthen ware and table ware industry which contains a 10 large percentage of free silica. 11 So we therefor, Mr* Commissioner, respectfully 12 request that during this period of postponement that 13 there he a restudy made of the surcharge rates as they 14 apply to the clay industry in order that they say be put 15 o n a more equitable and just basis. Thank you. 16 17 MS. OARF.MTER; - Anyone else here wishing to be 18 heard representing clay products? We have letters here 19 from, the lone Fire Brick Company stating Mr* Walter 20 s. Bonntree will represent them as attorney. 21 MB. WALTER S. R00NT11E 22 representing ICHE FIRE BRICK COMPANY 23 24 MR. EObMTREE: Mr. Commissioner and Gentlemens:: I 25 appear here representing three fire brick companies Xu 26 northern California, I wish to say that the only request 76- B 23182 7-35 30M CALIFORNIA STATE PRINTING O F F I C E 1 that v;e are going to sake at this time is that a reason2 able opportunity h e given to the corspani-es I represent 3 to aocumulate such data as they think will he helpful 4 to the Commission in determining what rates should apply 5 to the fire brick manufacturers in the particular area 6 where they are engaged in their business. 7 I think it is recognized in the industry itself, 8 the manufacture of brick and clay products, that special 9 consideration should be given to the question as to whether 10 or not the content of silica is particularly injurious in 11 the particular product they are working in. I think as 12 the injuries are coxisidered they should be broken down and 13 each particular area should be considered from its own 14 merits. We expect to produce data.which will be of 15 assists nee to the <3oasis si on. 18 I think all of the gentlemen here in the room feel 17 in the same frame of mind. T h e y want the opportunity to 18 develop their om. case, not with the idea of being 19 antagonistic but with the idea of a fair rate to apply 20 to their own industry. W think there should be at 21 least a continuance of ninety days to enable the people 22 we represent to produce such data as they find 23 available. 24 25 MB* O A B F M T S B : Sr have a letter her from the 28 Stockton Fire Brick Company stating Mr. John T. Bqberts -- 77- 23182 7-35 SOM CALIFORNIA STATE PRINTING O F F I C E 1 would ropysent them. 2 SB. B.0BIBT5: Sithing to say* Mr. 0 orniseioner. 3 MR. OAWPIKTKR: Anyone else representing any of the 4 clay produets industries who would like to be heard at 5 this time? The Rock, Sand and Gravel Producers 6 Association nominated Mr. 1. L Hall of San J'ranei sco 7 to represent them. Does Mr. Hall wish to he heard at this 8 time? 9 MR* E. J. G00DFA3TCB 10 , (Speaking for Mr.Hall) Executive Secretary, 11 Rock, Sand and % a ? e l Producers Associa tion of Sort h e m California. 12 13 MB. GOOBPASTGR: I am executive secretary of the 14 Rock, Sand and Gravel Producers Association of northern 15 California, The members of such association do i^iarry 16 rock and stone crushing and are engaged in the business 17 of stone rushing and sand and gravel digging,. Mr, Hall, 18 our representative, was hers this morning but being a n 19 attorney and because of a previous engagement in which he 20 had to go to court, he could not be here this afternoon. 21 ^ith your permission we would like to submit to 22 you in writing our objections to the application of these 23 surcharges to our industry at some later date. 24 i might say, following the remarks made by the man 25 from the Moulders Association that fully 90% of the 26 employees in the -industries I represent work entirely in -78- X the opea. A great deal of the processing is wet processing. 2 With your permission, Mr.Commiesloner, Mr, l a IX will 3 submit in writing oar objections, I thank you. 4 5 MR, CAEFS8TKR: Anyone else representing the sand 6 and gravel interests? Anyone here n the stone interests' 7 We have a letter from MeG-ilvray Raymond Corporation. . 8 Anyone from the stone or marble polishing business? We 9 will pass that. The glass ware, various glass olasslfi- 10 cations - is anyone representing those industries bore 11 today? 12 MR, BAAS: Mr. Feigeabaum was here this morning and 13 announced he would submit his contentions in writing." 14 MR. CARPMTCR: Anyone representing the automobile 15 classifications involved? 16 MR. S, F OAKS: Mr. Commissioner, I was.asked to 17 present credentials and a resolution fro the Commercial 18 Body Manufacturers Association, copies of which were filed 19 with the Deputy Commissioner in Los Angeles yesterday, 20 merely asking for a ninety day extension, 21 22 MR, CARPWMTFB: M o w , there are a number of classifi- 23 cations with small payrolls, involved. Are there any 24 representatives of other classifications involved here who 25 might wish to be heard? We have the- wheel manufacturers, 26 machinery products and talc mills and other classifications 23182 7-35 30M CALIFORNIA STATe 1 involving relatively smaller payrolls than those already 2 beard from - abrasive paper - asbestcsis. e have 3 heart a lot about silicosis today but nobody has had 4 anything to say about asbestosis, Anybody representing 5 those industries here ho 6ares to be heard? A n y ether 6 groups or bodies represented here? 7 MR. A. ?. LANGE 8 representing Retail Drygoods Association of 9 San Sea no Isoo. 10 11 MR. M U G S : Mr. Ooramissionez, 1 represent the 12 Retail Drygoods Association of S a n Fra no is so. H t h your 13 permission I would like to say a few words. 14 MR* GAHPIMf'fiR: In what way would they be interested? 15 MR, LARGS: They are vAisilly interested in anything 16 that affects the welfare o.f California* Cur sole 17 interest lies with California; anything that affects 18 California industry adversely affects us. It is f rom that 19 standpoint that I would like to read y o u a letter written 20 by Mr* Russell B, Carpenter, Chairman of the Insurance 21 Committee of the Retail Drygoods Association, to 22 Honorable Samuel L. Carpenter, Jr., Insurance 23 Commissioner: (reading) 24 in a ccording with notlee appearing in the Daily Commercial News of November 3, 1935, we advise you that 25 we have appointed Mr. A. p. Lange to represent us at the hearing to be held by y o u Friday, November 15, 1935, 26 for the purpose of considering 'a long schedule of -80- 23182 7-35 20M CALIFORNIA 5TATE PRINTING O F F I C E 1 proposed changes in compensation insurance rates.* 2 "As the notice does not specify the nature of the proposed changes - what classes are to be affected and 3 which, rates are to be advanced and which, are to be reduced -- it is obviously impossible for ns or our 4 representative to make preparation to participate as intelligently at the hearing as seems to us desirable 5 for- the protection of our interests, v.e therefore request that the business of the hearing on November 6 15th be confined to presentation of the proposed changes and the reasons therefor, and adjournment taken 7 to a date which will enable those interested to study the matter and prepare their comments or arguments for 8 or against your approval of such changes. 9 "Anticipating that the changes to b considered are due to changes in the California experience of insurance 10 carriers, we ask that we be furnished at as early a date as possible the following data limited to Workmen's 11 Compensation insurance carriers operating in California and elsewhere, for each of the five calendar years 12 1930 to 1934, both inclusive, as set forth in the reports on file in your -office, 13 Hat!ona1 0 ali forn ia (e n d , C a l i f o r n i a ) only __ 15 Premiums Losses 16 loss Ratio 17 "We also ask that those proposing changes in existing specific rates furnish similar data regarding 18 each rate to be changed. 19 "If it is wi'thin the scop of the hearing w e ask that considration be given to the following matters: 20 "Requiring insurance carriers to secure the 21 signature of the insured to the endorsement agreement, California Approved Form Wo, F-4, limiting and res 22 tricting the insurance to exclude certain relatives of the insured, 23 "Permitting Workmen's Compensation insurance 24 carriers to issue *stop loss* policies to self-insurers without present $100,000 limit of liability, 25 "Trusting that we may hear from you with reference 26 -Si 1 to the above, we are 2 3 4 5 6 'Very truly yours ms " R S H I L rOt-F a*GrO saw OiwDmtSs*MoAiSTsSnc0o01 A T I O S R. Da GJLBPaffiESt Chairman insurance 'Committee. 7 It is our belief, based on statistics furnished 8 us by the Insurance Commissi oner, that California is 9 paying and for a long time has paid far more for 10 workmen's compensation than is charged in other states. 11 Our yardstick for measuring rates is the loss ratio. 12 Some years ago the Department furnished me with a 13 statement showing the loss ratios in California ant 14 thirty-five other states. Shy they were limited to 15 thirty-five, I d o n 't remember now. 1 presume only 16 36 states at that time had workmen's compensation laws. 17 The document I have in ray pocket shows that 18 California was overcharged 48,600,000 in compensation 19 measured fey that yardstick. Subsequently I made up 20 figures for later years, *hat overcharge, according to 21 ray figures, runs in the neighborhood of 13,500,000 per 22 year. 23 It makes no difference to the Retail Drygoods ao t pay for insurance except as it affects the amount 26 o f money unnecessarily sent out of this state, There- l ! 1 fore we ask the Insurance Commissioner if he will 2 kindly have statements made up showing the loss ratio 3 in California and the loss ratio in othepstates in which 4 these eelf-same companies operate with the idea of fin- 5 ding out whether or not there i discrimination against 6 California. 7 We find in the Insurance Code this provision, that 8 the Insurance Commissioner is charged with the duty or 9 the power of passing on rates promulgated by the lating 10 Bureau or workmen's compensation. w find this 11 provision made, that the statistical and actuarial data 12 compiled hy the Industrial Accident Commission and. State 13 Compenstion Insurance Fund shall at all times be 14 available to the Commissioner for M s use in judging the 15 adequacy or inadequacy of rates or schedules filed. 1 We hope the Commissioner will insist upon having 17 the data filed with him and that it will he open to the 1Q committee, the policy holders, the premium payera and 19 employees of premium payers, to examine them and deter- 20 mine whether any advance is in order or whether 21 deductions are in order and in what classes. 22 23 MB. Q&EBSOTIR: I believe Assemblyman Mayo has 24 requested the opportunity of saying something. 25 28 -m- 1 MB. JUBSS M. MAYO Assemblyman* 2 Assembly Committe on Mines and Mining, 3 4 ME, MAYO: Mr. Commissioner and Gentlemen: I aia 5 sorry I was not here this morning, I only heard about this 6 meeting last night and due to conflicting engagements I 7 teas busy this morning so I apologize for not being here 8 and appearing at the time the mining industry had their 9 say this morning because primarily that is what I a m here 10 for, representing the mining industries inasmuch as the 11 tea counties 1 represent in the legislature are made up 12 of mining counties, 13 What little o f the proceedings I have heard so far 14 has been rather interesting, I heard m y good friend 15 John 0*Connell himself say "the insurance racket'** ant 16 some of us in the mining industry are ready to agree with 17 him. Whether it is a racket or not, with some of the 18 rates which are included in it, if it is not, it is border19 lag on it* 20 Some years ago there was a rate of $11.85 for a 21 hundred dollar payroll for all classes of mine employees 22 and that meant a stenographer in the mining office. The 23 mining company had to pay 111,85 per hundred dollar payroll 24 and probably across the street in maybe a n orchard or 25 something like that the rate would be 30#, and that was 26 the condition existing prior to 1933. 1 When I put that classification bill through the 2 &sseaaly and it became a law, the Insurance Commissioner 3 forced the insurance carriers to classify the sine risks 4 according to hazards, and another thing that we in the 5 mining industry, particularly the laymen, cannot under- 6 stand is why heretofore - I haven't the new figures but 7 when I did go into this matter thoroughly two. years ago 8 we found that out of the premiums paid, fey the mining 9 industry 40.6$ went for administrative overhead and 17$ 10 went for acquisition cost, !ifeat same rate of 40,.6$ for 11 administrative overhead was carried and possibly is today 12 for the |20 rate and also for the 5# rate. 13 Mow, in all business, we have bean taught in the 14 business world that the higher the t o It o the less our 15 overhead in percentage or business cost, but it i s n 't 16 so with the insurance industry. They have charged that 17 same rat of administrative overhead at every stags of 18 the game. 19 l respectfully ask the Commissioner to look into 20 that one field when he comes to approve or disapprove 21 these rates, that he look into that one phase of the 22 insurance, rates, why it is necessary to continue to rate 23 charge 40.6^ from a $1.00 or -*2.00/0n up because certainly t 24 the cost of writing a policy of 30# per f:100 payroll 25 which might apply in my office on purely clerical work, 26 would be the same as it is in the mining industry, yet 23182 7-35 -SOM CALIFORNIA STATE PRINTING O.FFICE 1 that 40*6$ that might he reasonable and proper for 2 a 11*00 rate has been harried os up to the #20.00'rate. 3 fhat is a ridiculous thing that we hope the Commissioner 4 will look into* 5 As to the volume of business, I think it is safe to 6 say the mining industry today is 100$ greater than it was 7 two years ago. Certainly the principle the greater the 8 volume the less the overhead* has not applied in this 9 case. It. is probably true - I h aven't the statistics 10 but 7 think I am safe in saying the mine payrolls and the 11 insurance business written for mines have probably more 12 than doubled in the last two years. Ye t we find the same 13 old administrative overhead and the same method of oalcu- 14 latioa occurring right on up in an industry that is 15 increasing. Se hope the Commissioner will look into 16 that phase of it. 17 Another thing, after that Supreme Court decision 18 and after the defeat of certain bills in the legislature 19 here, we come back and face this. Why all the fuse 20 when they can charge such exorbitant administrative over- 21 head. According to statistics, out of the premium 22 dollar the injured workingman gets less than 30$ of the 23 premium dollar paid. Primarily insurance is for labor 24 and secondarily for industry, to protect them from suits. 25 if labor gets less than 30$ of the premium dollar paid, 26 ^nat is wrong with that set-up? 1'he mining industry -- 86-- 1 has sever gone to Sacrament to m y knowledge and advocated 2 purely the State going into business, but if this sltua- 3 tion continues, I.am not saying this as a threat hut as 4 a warning, in the State of California the mining industry 5 and other industries will be forced to go to Sacramento 6 and work for a monopoly with 5$ overhead as other states 7 have done, Mot only is the mining industry faced with 8 these surcharges, paying double the charges, but they must 9 he penalized to carry oai 10 SB. 0ABPIS3T.?: I have a letter here from the 11 Paraffine Company saying that Dr. B. table will attend 12 this meeting and might wish to b e heard; a letter from 13 the Industrial Occident Commission stating Mr. C. B. Day 14 would be here. Is Mr.Bay here? I think now it might 1 5 b well, before wb adjourn this meeting, to call again 16 on Mr. Burbank who started the meeting this morning and 17 who might wish to talk upon the subject further at this 18 time. 19 20 MB. BOBBAMKs Mr. Commissioner,- the only answer I 21 would have to any remarks at this time would be for the 22 satisfaction of any of those present because I will sub- 23 rait to you a summary of rebuttal in detail when the 24 record is written up. However, if you will pardon m e with op; one or two remarks I want to remind you gentlemen of some- thing that apparently every speaker in opposition to 87 23162 7-35 SOM CALI FORM IA STATE 1 those rates has overloaded, at least he hasn't mentioned 2 it, and that is this: 3 W h e n -I outlined the proposal this morning I told you 4 that unless you had silicosis losses you would pay out 5 nothing for silicosis surcharge insurance, you would get 6 it back, and if your history proved that you were improper- 7 ly in this rating classification you would eventually be 8 removed entirely from this list of classifications. 9 flow, it has been vary, very cheery this afternoon 10 to hear there were so many industries that had no silicosis. 1 1 we understand from Mr Searls that there is no silicosis 12 in the mines; we under s t a n d from the moulders that that is 13 a very healthy industry, an old men*s organisation; 'we 14 understand from the cement people that dust of cement 15 doesn't cause silicosis. 16 Sow, gentlemen, under the proposition that we 17 suggested to you, we told you that this was on an absolute- 18 ly non-profit basis, that if the money that yo u paid was 19 not paid out in losses y o u received it b s e k 9 and if you 2 0 refuse to consider it on that basis, if you don't wish 2 1 to put up the money to protect the workmen who ma y have 2 2 silicosis, and I am cot going to argue about whether they 23have or not, we know what the increase in claims in the 241ast few years has been in a progressive ratio, we know 25that silicosis elalias are being made against all the 26industries more or less, we have a list of them and if 88- 23182 7-33 SOM CALIFORNIA STATE PLINTIHG O F F IC E 1 time permitted I could give them to you - if you d o n 't 2 want to follow it on thatbasis of putting up the money 3 on a pure cost basin then of course you have the alter4 native f acting on your own judgment If you believe 5 that your judgment is sound* that there is no- silicosis in 6 your particular .industry, then do not expect us to act on 7 that judgment when the records and our i n f o r m tion tell 8 us different* but ask for an insurance policy with 9 silicosis hazard excluded from it. That is perfectly 10 fair, we approve it one way or the other You put up 1 1 the money and if we- d o n 't use it we pay it back. If you 12 d o n 't want to do that and you are so cock-sure you have 13 no silicosis* exclude that from your policy and let 14 labor take the risk. The lord knows that you are our 15 customers and we don't want to hurt you a bit. We think 16 we are fairly intelligent and the last 'thing in the world 17 any intelligent man does in business is to hurt ais good 18 customers. 19 Every last man here has proclaimed, whether speaking 20 for labor or industry, that these rates were going to put 2 1 h i m out of business, I say to you there are one or two 22 .alternatives. Either you have no silicosis and you w o n 't 23 have to pay, you receive back any premiums you pay up and 24 therefore you w o n 't be put out of business; or there is 25 a call for benefits to Injured men and under the law 26 yo u have to take care o f those injured men. How, if 89 1 the law of workmen's compensation requires yo n to pay 2 benefits that are going to. put you out of business, 3 that is not m y fault. That is a matter entirely foreign 4 to this: we here no control of it. We do not want to 5 see anybody lose his Job or put out of business. We 6 simply say to you that insurance companies must be 7 _ solvents they cannot gamble, but we are willing to do 8 this on an absolutely cost basis, and let me say to you 9 gentlemen,something was said her about the very splen 10 did condition of the tats Compensation Insurance Fund. 11 I concur in that completely, it has enormous assets 12 and splendid reserves. So have most of the other 13 Carriers. The California Inspection Rating Bureau I 14 represent is supported b y every one of the carriers in 15 California including the State Fund, but the assets 16 there, the surplus there, doesn't belong to you t o use 17 for silicosis. It belongs to you for the risks that 18 you have been charged those premiums for. It belongs 19 to the farmers in the valley who have paid for their 20 protection. It will be paid back to you by partici 21 pating companies if they earn the money, This must 22 be considered intelligently and on its own. 23 Something has been said in the way of criticism 24 of the 40.6^ which is included in all workmen's compen 25 sation rates in addition to the pure premium. The pure 26 premium means that part of the premium which is devoted - 90- 1 to loss aad loss expense. U n i f o r m l y , as a result of 2 experience over the entire period of time that eompensa- 3 iron has been in effect in the United States, that 4 relative cost for overhead has been established. The 5 breakdown of that cost is as follows: 6 Taxes 2.1 Inspection 2.5 7 Adsaln istra tion and audit 9.5 Claims expanse 8 8 Acquisition 17.5 9 How, gentlemen, the Insurance Commissioner is com- 10 polled to make rates under the wording of the minimum 11 rating law as adequate for all carriers including insu- 12 ranee carriers which teal with agents and brokers, and 13 the established custom over the United States is- to pay 14 the acquisition eos% carried here. 15 As far as tbs' other items go, they are not subject to 16 modification, and notwithstanding the suggestion mads 17 that they should be decreased as the volume Increases, 18 it is found that the amount of administration and audit, 19 the amount of inspection work and taxes increase directly 20 as the amount of the premium lacreases. 21 H o man in my opinion has a right in California to 22 complain against this loading or against the acquisition 23 expense there which would be the only point of complaint. 24 If he doesn't care to deal with the company which deals pc * . with agents and brokers, he has a number of companies op including the otate Fund with whom he can do business on -91- 1 a participating basis and presumably return him dividends 2 hick are earned because they don't pay out those items, 3 There is no complaint on that, and yet because California 4 for twenty years has been an openly competitive state in 5 that respects for many reasons it has been thought wise 6 to permit it if you wanted it, and all of you, I venture 7 to say, are insured with companies paying the 17*5, and 8 it doesn't lie in my mouth or in the mind of the 9 Commissioner to ms Ice a rate that is not adequate for 10 the methods of business for all the companies. The 1 1 acquisition is there; it is not a matter of ground, for 12 complaint, 13 If any method esn be devised for protecting injured 14 workman and industry against the liability to the 15 injured and death from silicosis and have industry pay 16 that cost, better than we have devi s e d ,here, we are 17 delighted to have it offered, but we d o n 't assume with 18 anyone that there is no silicosis hazard. That is 19 silly. We know there is a silicosis hazard. We 20 know there are men in this state, notwithstanding they 21 will yell their heads off about these rates and claim 22 they have no silicosis exposure, that Insist on 23 insurance because they are not willing to take the risk 24 themselves, but we can't do it without the money to pay 25 for it, and all the money we a s k for to pay for it is 26 what it costs. If anything could be fairer than that, -92- 1 we d o n 't know what it is 2 MB. MATO: Isn't it a fast that the 17*5$ aqquisi- 3 tion is ia addition to the 40,6*? 4 MR. BURBA1K; So, it never was. 5 MR. KAYO: If it is 40.6 for the #1.00 rate and 6 for the #.9.00 rate the same cost is added -- 7 MR. BUHBA.SE: That is because the various items 8 of cost are found to vary directly as to the amount of 9 business handled. 10 MR. MAYO: How has that bean found? 11 MR. BURBANK: If you desire to go into that, if 12 you will go down 'to the Bureau we will show anybody 13 how that is arrived at..That is the method in stock 14 companies, how business is done, and the rates must be 15 sufficient for all carriers. As I said before, you 16 d o n 't have to do business on that basis if you d o n 't 17 uaat to. 18 MR, '3EAHLS: I would like to inquire on one ques- 19 tion in the silicosis matter. Y o u say they are not 20 going to insure us for silicosis on the present rate* 21 if a man were to file s claim against us now on the 22 present rate we would not be covered? 33 MR, BURBANK: Yes, you are. That is wh y we want 24 the change made as quickly as possible, 35 HR. BROCK: I would like to know whether the actual 26 losses paid out by the carriers ia California since , > 23182 7-35 30M CALIFORNIA STATE PRINTING O F F I C E 1 January 1, 1933, have amounted to in excess of $11*00 2 due to silicosis in underground mines or $14*00 in mill 3 men. 4 MB. BUSBAMK: I am glad you brought that up and I 5 also overlooked this South African angle. The answer 6 to your question is no, we didn't depend in the making 7 of these rates upon the cost of the silicosis claims 8 that have developed since January 1, 1933, those before 9 then being inconsequential. Those costs are not fully 10 developed at this time. We depend sofar as we use that 11 experience upon the showing - for instance, this year 12 there have been to date in excess of 63 claims made for 13 silicosis; last year 40 odd, and those claims do not 14 take into consideration the cases which are filed before 15 the Industrial Accident Commission of which there are 16 74 filed since December 1st of last year. Does that 17 answer your question? In other words, we are taking the 18 trend for rate making purposes because there isn't suffi- 19 cient time to establish cost basis from experience. We 20 have to take the trend and the trend is up. 21 FROM TH E FLOOR; If that be true and a company were 22 required to deposit, say, $50,000 as. silicosis coverage 23 at the beginning of the year, when would you b e justified 24 in rebating the #50,000 to that company if it had no 25 silicosis claims that year or paid no silicosis losses? 36 MR. BURBANK: The plan we propose it this: Assume ^94- jaBHSSHHSB * 23182 7-3S 30M C AUFpBN IA STATE .PRINTING O F F IC E 1 it cost #50,000 for your particular company an your 2 policy was takes out is the year 1955, 1935 issued 3 policies will all expire at the end of 1936, In.other. 4 words, the December policy would hays to expire. It is that 5 our plan tben/in January or February of 1937 we will 6 know exactly what claims have been filed against your 7 industry, and we hope to have the Commissioner supervise 8 the setting up of the eost of those elaists. L e t 's 9 assume, in order to he optimistic, that some given 10 industry had no claim whatsoever. Under this plan every 11 nickel paid in would be paid back some day shortly 12 after January, 1937. 13 FROM THI FLOOR: If this particular company put 14 up $50,000 it would theh get it hack? 15 MR* BURBANK: If there were no losses in the 16 industry* If there were losses in the industry, the 17 entire amount would be put up for the losses, 18 FROM THI FLOOR: Would we have to wait until fifteen 19 years lapsed to get back the $50,000, or would you 20 have to have the #50,000 held in escrow until the. : 21 unlimited statute of limitations decided it? 22 MR. BURBANK : This.plan contemplates that every year 23 money will be put up and every year the money of previous 24 years will he returned or the claims in each year will 25 be taken care of, 26 FROM THE FLOOR: If a mine closed down and the -95- 23182 7-35 30M CALIFORNIA STATE 1 company went out of business, the money would stay 2 there indefinitely? 3 MR. BURBANK: The $50,000 could always be returned 4 to the successor la interest. 5 FROM THE FLOOR: But if the mine closed down? 6 MR. BURBANK: would you do in any corporation 7 if you dissolved it and subsequently found yo u had an 8 asset? I guess you would arrange to get the money back. 9 The point I am making is that the money would be there 10 for you. 11 FROM THE FLOOR; Of the proposed 150,000 - we have 12 just used that figure - would this 40$ overhead be 13 deducted from that before it would he returned? 14 MR. BURBANK: The only overhead which would be 15 charged against you, that is, the only expense load, 16 meaning the 4 0 . 6 $ s that would be charged against you 17 is that portion f the premium which was used by the 18 industry. In other Words, if you had no losses you 19 would get back all your premium. I a m in error on 20 the last statement I made - we cannot give you b a c k the 21 taxes, but that is the intent, to give back all that is 22 possible. How are we going to give the 17-1/2$ back 23 paid for acquisition? The answer is this. $hen you 24 insure right now through an agent or broker and he 25 receives his commission, if at the end of the year it og turns out there must be a return premium to you because - 96- .23192 7-35 SOM CALIFORNIA STATE 1 your payroll hasn't covered your deposit, the commission 2 must he returned pro rata by the agent, and that would 3 be up to the company to see that the agent returned it 4 The company would be responsible. 5 FBOIS T H E FLOOR: Supposing these rates as you 6 recommend go into effect and they become the permanent 7 rates of the Commission, then when those rates are 8 paid in to the insurance companies, State or otherwise, 9 these particular raises that you get,' are they to be 10 kept in a special' fund? 11 MR. BUREAUX: Yes, sir. 12 FROM THE FLOOR: Entirely different from the 13 regular fund? 14 MR. BURBANK: A special reserve. 15 FROM THE FLOOR: And the same with the State and all 16 the balance? 1? MR, BOBBANX: Yes, we are charged as a liability 18 in. our statement and it is the plan suggested that the 19 money you pay Is set u p as a liability to be either 20 paid out to injured m e n in your industry or returned to 21 you, and further, to amend your suggestion a s to it 22 being a permanent rate, none of these rates are perms- 23 nent. If you have no silicosis, there is no reason 24 tbs rates cannot be dropped. 25 FROM TEE FLOOR: One question I would like to ask* 26 This morning you said it was fifteen to seventeen years 97- 1 before the disability became noticeable and the claim 2 Quid be made* 3 MR, BURBANK:- .Ton misunderstood me, `This is what 4 I intended to say, The average American experience 5 as to hen silicosis becomes disabling is found to be 6 fifteen years. It does became disabling in two or three 7 .years in rare eases. Mew York has taken seven years 8 se an average, and there are figures to show it is 9 absolutely correct, and the Massachusetts reports I 10 have have batches of statistics where many raen go 11 thirty years and some never develop silicosis although 12 they are exposed to it. 13 FROM T H S FLOOR; Y o u said silicosis is rarely 14 disabling until fifteen to seventeen years after expo- 15 sure* This afternoon you said this money the assured 16 pat up would be returned if no silicosis developed. 17 MM. BURBANK; I said he would get it back at the 18 end of the policy year 19 FROM TEE FLOGB: If that is true, we ar presuming 20 ail the industries o f California are flush with money 21 and care nothing about the interest rate on it, where 22 would that interest earning go on the money until the 23 time it was paid up? 24 HE* BURBANK.: I d o n 't know if that is considered 25 a profit for us in the Commissioner's m ind* If he wants 26 to do that, to give it back to the employer, so be it* -98- > 4 23182 7-35 SOM CALIFORNIA STATE PRINTING O F F IC E 21 told you ms are putting this to you on a non-profit &asis. 3 FROM THS FLOOR: Do tbs silicosis surcharge rates as p r o posed include the 4G*,6% overhead? 5 MB, BURBANK: They do. 6 FROM THS FLOOR: Then I understand that is at no profit to yourself? 8 MR, BURBANK: 1 think I fully explained that, 9 FROM THS FLOOR: You are spending the full 17.5 on lChcquisition? 11 MR. BURBANK: Some companies spend 1?.. 12 FROM THIS FLOOR: Y o u have a mandatory provision, it 13is mandatory to take this insurance and yet yo u have 1417.5% overload in that. 15 MR. BURBANK; You understand that two-thirds of the ^business in the State of California are in insurance 17eompanies which r e t u r n a participating profit to yo u 18whieh in most cases is in exeess of the 17-1/2%. 19 F'-OM TH1 FLOOR;; Setting at the actual basis on sowhieh the surcharges are proposed, take underground 21mining - what experience rating have y o u is Oali forsia the 22mines showing 11*45 is/eorrect rate? 23 MR. BURBANK: We haven't any. presumptious 24 FROM THS FLOOR: B o s 't you think it is rather/then 25to come in and propose that rate? 26 MR. BURBANK:. No*. i explained this morning that -99-  23182 7-33 30M CALIFORNIA STATE PRINTING O F F IC E 1 the rating as made by taking the ratio between the 2 hazard and the information available which was the foundry 3 information, and if these tentative sums you put up don't 4 work out in experience, those relative ratios may he 5 modified* That is something that will always be before 6 the Commissioner. 7 FROM THE FLOOR: This morning yon said a good deal 8 about these reports of Massachusetts, Pennsylvania and 9 Wisconsin but you said nothing about the experience 10 rates in California. 11 MR. RURB&M: There are no actual experience rates 12 in California; they h a v e n 't been acquired on silicosis. ' 13 Until 1935 there were no significant losses on silicosis 14 to establish any -silicosis experience. inee 1933 and 15 1934 the amount of experience there is utterly insuffi- 16 cleat. Yo u c a n 't base a ratio on that.. 17 FROM THIS FLOOR: One more question. hat do you iS think the effect would be if certain numbers of the 19 legal fraternity whoa some people have called 'shysters' 20 should see a huge fund in the insurance companies* 21 treasuries taken for the purpose of providing for 22 silicosis hazards? i>on't you think the very fact that 23 you have introduced rates so high would tend to induce 24 tremendous claims? 25 MR. BRHBANK: Sfo, I d o n 't. There are eighteen to 26 twenty million dollars available right now for that -ICC- 1 purpose, I aon* t think if you tot another million it 2 would make any difference. 3 FROM THK FLOOR: were any employers or policy / 4 holders brought into consultation before you fixed your 5 rates, or was it merely a company proposition? 6 SR, RRHB.W:. It was fixed by the study of the 7 organization or the Bureau. We spend from |100,000 to 8 |150j000 a year to maintain experience. It is a faet- 9 finding organization on everything pertaining to 10 compensation* These rates were made up by that group 11 of men. 12 .JBOM TIB FLOOR: Have you any statistics as to Hie 13 amount of money paid out since that Supreme Court 14 decision on direct losses for silicosis? 15 MR# BORBiHK: I d o n 't know if we have or not but do 16 if we/have it would not b e useful. 17 FROM THE FLOOR: Hava there been any claims? 18 MB. B U R 8 & M ; Yes, and that may be ascertained, but 19 that would not be useful for the reason that a great 20 majority, 51 of the cases filed with the Industrial 21 Accident Commission, c ame out of the Argonaut strike. 22 Those were old cases. They went to the sanitarium and 23 dug up men who were laid up with tuberculosis for a 24 long time. The y dug up widows, and man y of the eases 25 were of very doubtful nature, very old, a very serious 26 question of the statute of limitations on some of them. -101- 1 FROM THB FLOOR; I think it is admissible that the 2Argonaut eases are debatable, but certainly you should 3 find out how much was actually paid out, 4 MB* B B B B A M : vie could find out but it would not 5 be useful, 6 MB. MAYO: 'What I pay ssy wholesale house is 7 useful in determining my overhead cost* 8 MB* B O S B A M : Take onema n - I d o n 't know if he is 9 in the room - an Insurance man told me he had. six eases of 1silicosis* He was surprised t find six. Five of the 11 six are life pensions. The cost very likely will 12run to very large figures, I an tell you this - I know 13 of one case where' a certain insurer has a $32,000 14reserve not because,, gentlemen, silicosis eventually 15kills but it induces - I can't help what the doctor l6 said this morning - silicosis predisposes to tuberculosis 17of a type that lingers and kills* According to medical i s experience it is incurable. That means you have a $5,000 I9 death benefit to meet, but in the meantime you must 20 count on a average medical cost of confinement and support 21 which is far beyond., a n y acci d e n t cost. FROM THI FLOOR: How is ra P^oof of this going to 23 be made? Take the case of a man only working in ^ C a l i f o r n i a two years with a group of fifty men recruited OK * from all over California, Utah, Sevada and everywhere else. 26 MR. StTRBAM: Under the law of California the - S' -A 23182 7-35 SOM CALIFORNIA STATE PRINT)MG.0 F F IC E 1 employer is only liable for the proportion of the time 2 the man worked for M m * his pro rata of the time of . 3 exposure. If you ean prove that the .man worked for 4 you one year and that he worked treaty years in Ilevada, 5 you would be liable for one-twentyfirst. 6 FROM THE FLOOR: & s ^ understand, this hearing 7 coses up on the application of the Bureau for the 8 establishment of change of rates. I suppose in the 9 application the proposed plan is outlined in detail, 10 including the rates. I think we hive all copies of 11 the proposed rates* Will there be available to the 12 members who have come to this meeting a copy of the 13 plan itself? 14 MR. GARFEMTER: j Bant to say we have been debating 15 the question as to how many copies would be needed and 16 the expense, and also copies of the transcript of today. 17 There will be available at least in the Insurance 18 Commissioner*s office in Los A n g e l e s , San Francisco 19 and Sacramento copies of the transcript o f the hearing 20 here today w ith the information furnished, which 21 included the introduction in general of the plan by 22 the Bureau. There is so much data on this - the 23 Commissioner's file is already about.this high and if 24 we begin to print or publish all of the data compiled 25 in connection with it I think there is no question the 26 expense would run far beyond the Insurance Commissioner's ?103- . t 23102 7-35 30M CALIFORNIA STATE PR IN TINS.OF F IC E 1 budget to operata his office. I think: if any parson 2 here desires a copy of the transcript today or s copy 3 of some of the other m i t e r s parts icing to it', that 4 probably too could ha arranged so that you could.pur- 5 chase those copies. 6 MB. .BtTKBASF: lith respect to any of the lists o f 7 rates or the plan, the suggested plan of handling the 8 deposit of the fund or reserve of it or any portion of 9 the supporting data to the application, if you will 10 give us a couple of d a y s ' not ice the Bureau will be very 11 glad to furnish that, 12 ' FROM TS B H.GOR: $$** O'oEBRiseiche?, may X ask one 13 question? This morning y o u made reference to the 14 conditio that existed in the mines in South Africa 15 and they were referred to in several instances. 16 KR. BURMTU'r I forgot to mention that. The only 17 reason I mentioned the silicosis experience in South 18 Africa, the only reason I mentioned the three to five 19 million dollars damage due to silicosis in the eastern 20 part of the Butted States, was merely in passing to 21 indicate the seriousness of the problem. I do not say 22 and did not intend to say and it is not a fact that the 23 experience in South Africa or with respect to damage 24 suits in the United states was used in any way ia the 25 making up of aay of these rates* It is a fast that in 26 South Africa since 1902 they have had this .problem -104- 1 and. in England they have worked oat this problem in a 2 more refined way than any other place except Ontario 3 which has heart working on it for a number Of years, 4 1 merely gave them as examples of the situation* They 5 are not used as a basis for our computation* 6 MI, PIAT1: ' If you d i d n 't use South Africa 7 as a basis or you d i d n 't use these foundries in the 8 east, what in G o d 's name did you use? 9 MI, BURBilMrr e did use the foundries, 'We d i d n 't 10 have the figures in South Africa. All we had was the 11 official report on South Africa which was general data 12 on cost over a long period of time, 13 Ml, PLATS; Y o u h aven't the slightest idea of 14 the conditions in South Africa. 15 yr. BV1BAMF: 1 have now. Y o u told us about it* IS MJU PLATS; The South African mines are notorious 17 for their dust; theyh ave sandstone walla and in deep 18 mines, are poorly Ventilated and they, are working negroes, 19 and y o u try to pit that condition against these mines* 20 we mining men in California pride ourselves on the work 21 we do for safety and good conditions, Me pride ourselves 22 on it and you come along and take South Africa, take 23 anything, Tiiabuctoe., Alaska or any place and try to wish 24 |11,00 on us and cut our throats, MR. BURBANK: My dear sir, let me say this to you, 26 that if the mines in California have non-existent silicosis " A. - * 23182 7-35 30M CALIFORNIA 5TATS PRINTING O F F IC E 1 hazard, you get back every nickel you put up. If you 2 are willing to stand on your judgment, just exclude 3 silicosis from your insurance policy# 4 MR, PLATE: That is the most beautiful dream 5 I have ever heard, I came out here in 191?.and opened 6 a mine. aeh year the rates have gone up and each year 7 it was said it wouldn't be any more, fthen I was on 8 Governor Holph* s committee of fifteen investigating 9 this compensation business we were a bunch of babies and 10 were licked before we started* We got information and 11 data fro the United States Bureau of Fines and all that 12 data showed that California accidents were on the 13 decrease every year but the rate was going up every 14 year and there was no rhyme or reason to it, . 40,6 was 15 handed to us, w e couldn't help that, but the rates next 16 year would have to be a little higher because expenses 17 were more and your Bureau showed it should be, while t h e 18 united States Bureau o f Mines showed that our fatalities 19 and accidents were going all the time, but we were 20 paying more. Right now y o u com along with the silicosis 21 scare and raise the underground rates 100$ and then tell 22 us we will get our money back. That is fine news! We 23 will lose the interest o n our money and we d o n 't know 24 that we will get our money back. Sod knows we have 25 never got anything back in the last fifteen years, 26 KR,-BUBMilK: All I have to say, if you don*t get - 106- 23182 7-35. 30M CALIFORNIA STATE PRINTING O F F I C E 1 any money back you are in a different position than 2 most of the employers in the state 3 MS. PLATS: I have beard a lot from them* too* 4 as to what they were supposed to get and d idn't, Is 5 the Commissioner \m have now a Californian? 6 IE. O&RPBlTSRt I certainly am. 7 MB* PLATE: I am, too. X was horn here and love 8 my state. We have been trying for years in the 9 mining business to see if we could ever get some of the 10 money going into Canada and Mexico; .we have the m i n e s ' 11 here. We are now getting the money on the stength of 12 #35.00 gold and you fellows - and the variance tax is 13 another - are doing everything in your power to drive 14 the money out of the state and shut down the mines, and 15 believe me a lot of them will be slsit down. Y o u d o n 't 16 realise thenumber of marginal mines where it only takes 17 some little thing to tip it over into the red. I want 18 to tell you you are going to close down the mines which 19 are opening up and putting hundreds of men to work. 20 MR, BURBANK: I know this, whether they are marginal 21 mines or big mines, if there are injured me n y o u have 22 to pay the loss and y o u ca n 't pay a #1.10 loss out of a 23 1,00 rate. 24 MB. CARPENTER: Gentlemen, I want to thank you for 25 your consideration today and your attention and courtesy 26 at this meeting. I want to say that this meeting will be -107- 1 adjourned tg a future date to be given out later* We 2 will notify all those that ware bare and everybody else 3 we can think of who will be interested* fe will have an 4 adjourned meeting in Los Angeles and' then possibly at a 5 later date an adjourned meeting here, 6 Regardless of the time set for that meeting, I would 7 request that those industries which desire to file infor# 8 sat ion with me begin their work at once. X will caamuni- 9 eat with the representatives of the various industries 10 and try to fix as early date as possible, I a m one of 11 those people who believe when you have a job to do, it is 12 a good thing to do it and got it out of the way, and the 13 extent of this proposition hanging over the state is 14 detrimental, I think it is something that should fee 15 decided within a reasonable time, but I want to extent 1 that reasonable time to y o u and ask your cooperation to 17 make that reasonable time as short as possible 18 I thank you very much, gentlemen. 19 20 1 STATE OF CALIFORNIA ) ) 2 CITY A N D COUNTY OF ) SS. SAN FRANCISCO ) 3 4 I, N. R. BASSETT, hereby certify that I am no?, ; 5 and at the times herein mentioned was, a duly appointed, ' * 6 qualified and acting official phonographic reporter of 7 the Department of Investment, Division of Corporations, 8 State of California; that, as said official phonographic 9 reporter, I attended the hearing of the above entitled 10matter in the Division of Insurance, and reported in 11 shorthand all the proceedings had therein; that the within 12 and foregoing reporter's transcript, consisting of 108 13 pages, is a full, true, fair, complete and correct 14 transcript of the proceedings had at the hearing of the 15 said entitled matter, and that the said reporter's 16 transcript was prepared by me from my shorthand notes so 17 taken. 18 19 DATED: San Francisco, California, 20 December 2, 19S5. Z1B84 B-3B 30M CALIFORNIA STATE PRINTING O F F I C E 23 24 25 26 I C a l i f o r n i a In s p e c t i o n R a t i n g - b u r e a u 1 X4 = S-JNS O M E S T R E E T S A N E R .AJSTCISCO , O A U N . R . A .. W H I T T A K E R J . o . T S O B E R G A4A N A O E R 8 MEMORANDUM TO MR. A. H. MOWBRAY RECEIVE 10, 1937 M av II 4 u PH DIVISION OF INSUR, RE: EX-SILICOSIS ENDORSEMENT. This will confirm our conversation with reference to the question of endorsements in use tending to waive the liability for pneumonoconiosis. Following the Commissioner's final decision of May 1st, 1956, and in accordance `With instructions contained in the last par agraph of that decision, Tie prepared, after conferring with the Bureau attorney, a sample endorsement form which was indicated as California Approved Form #9, This specimen endorsement in printers proof form was forwarded to the Commissioner at that time and we feel sure you now have it in your possession. For the purpose of this raemoranduiji, the only two features of the endorsement which are of importance .are (1) the side note; and (2) the wording in the body of the endorsement. These are as follows: "INDUSTRIAL DUST DISEASES. (Pneumonocon iosis includ ing silicosis and asbestosis) Any liability for any workmen's compensation benefits or any other liability of the employer to any employee or dependent, or any cost, expense, or service to the employer, arising from or incidental to industrial dust diseases (pneumonoconiosis NOT including silicosis and asbestosis) or any INSURED aggregation thereof or thereby," Ever since the Commissioner's decision was rendered, the Bureau has refused to approve any policies submitted to us involving any of the surcharge classifications to which were attached any en dorsement forms tending to waive the liability for pneumonoconiosis. All such policies have been stamped "Passed subject to Investigation" and we have maintained a record of such policies. We have repeatedly advised inquiring members that the use of the newly recommended form (Form 9) or the previously approved forms ($5 and #6) with wording inserted to waive this liability would have no force or effect and we felt would immediately be rejected'by the Industrial Accident Commission in the event of a claim on the grounds that it had not been previously submitted to them for their examination as required by the lav/. MEMOR.SNDDM - 5/10/3? EX SILICOSIS ENDORSEMENT. -2 - > We append to this memorandum a copy of our record indicating the policies no* outstanding bearing such limiting and restricting en dorsements. At the head of each sheet we indicate the skeleton of the endorsement used by the particular company as to sidenote and body of the endorsement. It is understood that all other features of the endorsement are in order. You will notice many different forms but the great majority of companies have seized upon the new language con tained in the recommended form $9. It is our intention to await the approval of the Insurance Commissioner of this form or some substitute for it and upon receipt of such approval, notify each member company who has any of the forms outstanding which do not agree with the finally approved form to cor rect and resubmit for Bureau approval or to entirely eliminate the endorsement from their policy and add the surcharge. We also have a duplicate record which we intend to use as a check against the companies' reports of the registered mail return re ceipts notifying the Industrial Accident Commission of all such out standing policies. As to your comment regarding Rule 5 of the Insurance Commiss i o n e r 's ruling of October 11th, 1989, in our opinion the automatic thirty day approval provided in this section will not apply in the case of these silicosis endorsements. In the first place, the policy with such an endorsement attached has never been officially approved by the Bureau and in the second place, to take advantage of a technicality, it has not complied with the second provision contained in the Order, ' i.e., ''and provided that such endorsement shall be immediately sub mitted in triplicate to the California Inspection Rating Bureau for transmittal to the Insurance Commissioner." In the third place, we take the language of the Commissioner's order of May 1st, 1936, "Upon approval of the endorsement form all carriers may issue policies excluding the hazards of pneumonoconiosis" as superseding any other provision contained in the general Order dealing with limiting and restricting endorsements issued October 11th, 1929, and an attempt to so endorse any policies prior to the receipt of some officially approved form is entirely valueless and leaves the companies with no legal standing. This is in accordance with our repeated advices to the carriers. R A W :LM 3 T . J 3 M D ...Ci Big Horn folle?- oerrer IlS, Wntota&w&fkt reads; XBBD!BKX m sT siss5ss ffeemmpecmiosl s imelmiag silicosis s a i sa b e tosis) HST * w m w * Co*, *%* Pelley #580664, stelas #1134* Emlag. *m& lia b ilit y fo r asy orfr-i'*6 Oospemeat temo f i t s te sa y employee es 'epeae&i* e r aay m n t f m pm m s em e te t esplder, arisimg f*e* er im m t & l te l&uatrial slt aat Siseases. Cpmeartomoesmlesis a t M i s slleesis sm ssteste sis) r any s g p ^ im ite m th e re o f r thereby** M e Melile* tadUaett & atabla I4 $ m m M W K co* lasSS Imlfms; Material Deaiera #4020 Briete tlfg* #&y 4i80 im rnm m t o o . < E s -s iU e o 8is } itaerle& a M is e ra i Co* #4053 {B }a A v 9/1/36 to 10/1/56.) P o llo y sritfco n as f a lla is 5 C u v e rls g a il. operettosi- o f ssured% i io ra ese a t re a i-s j {C a lif.A p w K n ro f t w #8) m&lQYiXi* ttot ' *,**. t h ic f o i y BGS8 B SSOHB* tmm&& is s oe & s n i. s o s t m s b a s b s (m m m m m iab is ' . ! rsu m xp s irjG o s a ip m is w o s is ) O T LX4B1L1TT FOE A83T *0SJB81f*fr 0 , BBMFITS t o a k ? n m m s s o r b w w cosr, S5SE83S OH- SSRlTl:.: TO 0B mWSMm m iS m m m m m s m m M * t o n a w s m A ' rast vussussa (M iaB M iodoittoss t ic m sa s m g o s is m> a s b e s t o s i s ) <m w t a w s m m x g t w o ? o m gBBm -f marlmn M im erai C e , {#4$67 CBsaewal o f S fM o y 4068} 10/1/34 to 11/1/36 B a lle ? w t t t as above* AatriMB Mnsral Co# #3846 Ben! o f M u t e r 40B7, /2/3& to 11/10/36 m rl& en Sises1 Co* #3858* M m w m l a f Bn& r 3846* 11/10/56 to 11/15/36 American Miserai Oo. f 28-87664, - 9/1/36-37 (Somnrai of Btnor 3658} Sorsiee Gravai Oo*., #S0 85547 Badoieniottt -offeotise 7/1/56 Filtrol Corp*,. m 87703, , Polie? as f t im & # 1 .458 Ors Milli&g 23 Min iag-Udergroui Ca U T O S K I A ?0BTT,ISHD GSS&K? C0, #EC 80223, Esorseoeat eff, 4/6/37 ihoxfs LBi+rsmmr i&s itm Wmsma&r ti p CbS$&m *4ttlws or Polis. <iu. * S90, liarsfiat as t & a m t # M 4 S & m x y 905. " &iX*&m+$i*m #s taSASI MOT mmm * 4 rospoete jisoasa fco* astrava tiam tfeozoof or 4*a$h tlisy@f.sm| & m * A i& s M t s t 4 B <4 ^ s m i o s of cu** a * M r a - * ? 00 ssioi bar lip I* Lsv of W W 0t 'im ftutasoifc* lo lt o&trote 8f y oostsyoe*" HEW s m g (JSS-Siliooss) SBSGO aSBBSTQS BO PoULey #M90 S0L7 #***,,.. * , B o lio y 0098r #1869 S p ia s i eg &M Ooos} 3638 Haefcla step* 3&68( l a l l M fg . aaS staeflttrd xospti* lBfierswaat *es* C S alii *.fp?oyai Foro #9 - Industrial . *****-**# Arar liability for any aorte* -eosp* 9t*s* i**we aaakstloa te se tita ta eay employe or OepBt* ( l8 W o o d t e l9 or ay cost* xpesse or serlee to the employer* iaeluiX ss s iliO te is s ris la g from or im i m t& l to iadut*ieX duet ans asteasteis) ise&ses { & ai a lndtaftlag s t i m JStot Insare mul astee toe!} or any *ro?atioii thereof or thereby IMSeO-EBSl QBX.S8. SO* 280. PASO SOS09 {Otter & 00.5 #0.i4* Brisk Mfg* mrnmim o m m oommr { ^ b h q ^&ib) m w m s Q M ls.*-A##J3f,5 Fc & i o y J o i - M S o n Folio? severs lilis Eiai&g* BaSsrsemeat re&Aa$ Cali # Approved. .form #9* mm&mML -**.#*** Any liability for asy M&wm*s OTT ^passti,si benefits to any sxssasbs Fmeasomoeoa as le s^liasree or &p&s&& er sy esst* spesse or service te tue ift'Mis silicosis.. alywr lineisi freie-ar isct* sn. ssfeostosisi *' eatal te industriel set diseases . sd ihsbes {paaBsoscaiosis is*eluisg ailioei alt cshesfc@sis$ er egr aggravcticm thereof #r thereby*." i t iFolle?ccsosvemrsF#i4r40n6080e4*o,*GSienmaee*rae, tQPeorFl^irmocXydatnigteg%im*nfmggm*.m * ?| / jp v" > 1 0S9 Irrigati cs er drei sage systeas-- osst ' W0*StoriltSgBr Acfofv0a0s*s #3F0o8l$io*?ljleini-lls4aeSS4Bros e r o th e r aum*farrobe retale* iMioii b r a s s youRonr. m i e ? #0 1- 10 4 4 4 9 * Policy covers #383, Fousirlee-ci^miBsm BS3MS3 HF3* CO# #UUS4e 3SSB flaetii sfeci) 3081 foundries BAH48&VA13 & S S. ELa m ? , #01-113444. #S403* Cajtpe&try #SSg3* Cenerete bridges #i0m31m$*, ^smmttim Oca er te Gosst.* fSOiS* Masonry f$E0S*. Briver #@306* enent cric l#o9s9e0s?,' EGwiildingg ilfi* Sterne Crashing* #*Q8$, & m i s co* Briete Bfgr, oiuiistos (Ks-Ollieosis) S P A R A T O LIMITED MUTUAL Hidecfeer Brick Co, Policy #Q 10080 Policy is written, to cover yrflQ,Stone Crushing Endorsement reads; MIND CIRIAL DUST DISIASI (Pneuraonoeoniosis ineluding sili cosis and asbest os is) M O T IESUHSD ,v . * . * wany 1 iah.ility Tor any. Workmen? s Comp* ensatioa benefits or any other liability of the Employer to any employee or dependentor any ost, expense or service to the" Stoployer* arising from or incidental to industrial dttst diseases (Pneuraonoeoniosis including silicosis) and asbestosis) or any aggravation thereof or thereby*" Liquid Fuel Appliances, Inc., G 1011? Policy is written to cover 5109, Store Mfg* Endorsement as above. Oropalle ( T o n f i B w e v t e m Brees & l m n t m fdy* Co #C 10195 #3005 foundries* L * . D * W e W 9 T*M*HfeU DBA S/5BHAFT '>F:0DUCT3,C 10246 $%&B Staci estlags, MARCOS ROOK, EfO, #C 10000 Policy i e rltte n 'as #1710 stone Crushing m m (ori'T) DBA Hoxxmxjs psttrey* e icss ? , Policy is written to cover.#4030 Potteries* 1TI0S, T O S E S gs SSH.#C 16426 #180S Stone Cutting, U M B Y 4 HOWELL DBa XrSLL*3 F00HBRY S0:ai Iron Foundry* w e e w m m * mmmTs Wfc iUm.utnim ffi&MB, Ore Milling, De Sos n&KE&e? An lad, |S 10472* |5QgB Masonry #180 stone 0? Ci) O t - fit '- :V'f " . V i.A'S f j? 9^ V...> 'h o *h>*$ O-SvS* fil ts. OO H M,7 frlffc%*<K**M2 J.,3 fM* m B *o>*I O fi o o a s 0pj e if m OS '4"5 CeS' sfw fs-*f ctai i.'(IV* m>j'J o o o fHjstuiu?B o O f.r.j m m >&- 0** S ja <ca4j Nm'SSS f{f@1wi4*M..-4 &Ci*'['O*^*#i 11 JM 'PS d &2 Or 3 M C.3osoe '&i O1 'i'L;fg g Os t* fi'/j mst es^ St 8} S i3*<U ** 4,7) H G*) H '4 H o0 . P fe f $ O 5 f* H3 f o IfS S "SS* l N O H> fr-- f- is <*? i 0 6 Si t? 3;;-.r v - i- gP r 4 mOOA I *3 P S:,? ci $ # tS #jji* 4*O !3 Mr.Jw$* <>*ia sS>J**w* ; 4 ` #k 'o *fU :p# P M H m m seaas #* Wo 0 CS 9 m s . m aganisgs I %i g oo s o ) mitions c M z & M s m co, a*usy #s m ***** MLltsr i dritten s #3@* iDEmff altts, M r s s a w i g9nr&& r #&* ss follows* *% 3BB08&Q81S& *****.w*****.s rssfsets i a $ H $ 9 s for O s a t U ress&ttfisg TO f is s a n o - f e o f s f f s s ) e r aagr. l i a b i l i t y fs r 'e & y arisaei* feoss&ts je asy tfisr I t n t t it y tw& Msesseo ls 'tsploysr t ssy or tspoiismt# w r sa*^ sost* x p m s r -mbievim to Wss e$ifr* loots t&si-aSiig arlstsig f s o f lml#omtol to ifiaot-ftst. lost lltosts am diseases jtfwmomwlAsle notolag siiteosis asbostosis) a M sshsstSsts) 03 aoy grsmttaii th&ret o r Ilot agwrs* t&afsbgw** s m m Atm- mumm&L ms mss & w m u & T #43LS3 Oattistrsl ear rfs lass firmtyrn *&)** w &*.* |G 103785  m B T m m (3*s i u q o b 8) jam M i j r &g #4000* Sand 85 Gravel Blpgisg* lSipmeieta' fil s te? SfiSiffiS . an/or ****.***** fey xgxgaao gxgsxacxaHe as. employee %o f eeeupatioBal tissase* M s exeloion o f 'eoferag m n l & apply aiy Issafar as sy r mt mmiMng" th&fsam m-mrs $0 tte employa t&Kntgft i& mn%&Q$lm f a seupsMosaX d ise a se ** HOM#I3SSSUXSL, DiSsHaSt SfLOtKaEbaarsTaQrdCSs SSBB BOCK & 3&KB G0, 40* Sas & Gravai Digging C a l i f * 0 1 63 , Plumb ppxoTQ P teirg a #C55G Ssplegre * * s u s ta in e d kg Tsma. mIntsu r ed PserMoneente s ts or S ilico si * `S ~ Q&smux* {Sss^Silieo-si& S a A o ) a# h * mmm* sou? m 243a , P a lis y m it u m so #1020, h e n rie s * SB&oessmeiit reaolsi t# . * * * ***** Spmifi .a.s ro s ie s t la jM F ie a fo r ds&th CMMilftftfig tB e r e fim l ideation iSiAstaiaed by asy fif.fiitofi wit-fa mtiMmttnm and/or $agr occupational, disease m m h as j M B M D M n l o s t S f t fbtftisie, Operations #r sillo&sSs* sales said escXey^ as* nested herein* aad/or itecloyses I t is fa r th e r $paS. th a t M in im a l, GoAojr*** &iad to * f ^ llw ia g e o n d itlm is e m i^ -s s lr asfi # a o a & itia s prseadeat in garoteafcioa o f M tissi-al isa l^f^o s| ^seti a d d itio n a l ess* play s t be s tte ifc te d tm m y mw&m.%im a3 fin d in g s had -as- to th e s i s p o f th a h *** deser-tbed d ise a se , a ffile * - ta n ,o r is^apy sad apom a fs v o n ^ h f i M ia s * ad th a t fla ttin g c s iy , s h a ll s a id empi&sr&sss h& added t th p c iic y b s re ia ** 1-, 13* Push* Partssr lush I# John Jeh&saia OB ,il?IIE .y--bl27 Policy #2454* Bailey oyers #1620* ^arrisa* . liXTIii C ^ T X K G oo, kites'- #2441* #3888 alts&lssm Brass ether nos,*f&5>Tm& rmt&is (ImmAriss) b * f * z u o s i s a oso o e s i & & n y GO, Policy # S M U 0 X m 9 Stains* SOCST'* AW0OD SOCK SO, Policy #94, #17X0* Sim Crashing* #400,. &*&& and gravel dl^^tug, #7210, Triistoa, S3BS* astronoMls Oarage* ms augslss mRBS & m i Co* ma/* mum^m fjys ,oa. #&e, I W i Stoss Cutting V. Polia&teg, 3822* Sarfcic & tons setting* 5348* Ifor&i ot steas sttir^iaside constraction, CII3B30CK U M E SO* #103 #104, lisss ?4f:g* #4037* Plaster era? staff mtxllig* m m m m i so* # m * | 8 W 0 , Bridge Building, metal* #6003* m e driv i n g 5.C40, Pointing (steel etraelrovoe or bridge'!80S, Jm n qt steel eraetiosu, S lb se m * B# 4a0ntte r, i sB rDiBcikV. TaaafHg*B0y,-. SO C K & SB* #317* . h x o im i p o rrm r* |S48 . #4001* Clay digging sad 4033* Potteries* M l l a r d , B s b im , & SBStth, J o in tly m BOCXEfB RX1330 SHH3CA.TS*. #3399, S is te r ft d u lle r , C o-T ru stees o f WBOfSSS BOOK m om gTg In c * #279*' Beney DBA M m 1 CIS FL&SBR O T A * #2416* #1X88, Sttsias* BoxnrBo:: Q gM lXA , M T f X ( M t l i O M i * IM ^ s e c s a f) I m J D* #848* #4041 t i l e r e a irl& e iw a m isf& * | , Cissy lg g is g * mamm m m m m im ztm * # s 4 ia * im m * Vwamm* *> la e W U * tto a 13081* baa& ri*& * O S E S K iB #4000* &CmC$H.- .R & UPI G rw aH l IS * #S4#* ig g lif* ' . -m m im m m m TE 00* w b * &8 l i 7 ? ^ ^ lU S S i S ig la s ' ' M I S T A S t 3 P , #38$. . f a s s * tStsftag #US8 &3*0 t& H n t | W 8 , 8810* BIS- rat HUttt *CT2*. #SS8* U 3 3 , V l ia g . #0078, 810* .',tf<s ?itsnr* iss* ^iss, c a r r i e s M ^ e & X g & h r * #404X* m^tsmrnmt^ o r n i * locssse v a i l s t a a c j s s a m o o* #8if* . #Xfi ygmzwlm, .... o r a k is b c o * i =ic t #1004 uarries 3M. O O m O E U C #8370 'i m i vame E, J* f l #8384 #00S S a M % om wel aiggiMg M0>B 38S I82S B I2 CCRP* # S 3 8 #S$S& FltnA&BS i?30l Faaar8^1*a (SeaSblaaiiag* rated 8R*XSf tSD GO* XVG* #828 #Miil3tg sabeale CHASLES W. HAHQS E o lie ? Ss* 235S #4000 Bm m. G ravel B iggig F^JLSRlfl:tiS0.* | Corp*} #4X9* #X74X S illa s Q stad isa M01F1KD M0MM3H CO* #438* .#2808* tose C u ttin g * H1SDBAVT m s GO* # M 3 # 4 0 4 1 , T ils o r sart na.ra a fg * 4088, B o tte rio a - , op * *JoreS? w fw w w ,iw ww n*>pnv-w y**/***,-,.*-* sat,) _ -y, 1 A* w a s a r , Volley #c s u fiiss, attni&g* . .\ .; , mwm mamme mm msm mm4 or $mm mm mon&nm* big, Eis t n g Sofetule* G O W B S M l l s - XSf# S a a s s a & t - H e t e l* Mlaiag ao&ami&i ( M L ) ,iH XHD* B 2 Etaim g Se&e&ul BRgcs msrnmu* p o sta* 921? yaelBS^st 40 Sat & O s m ! iggtg St* Bafeersfi s M ORO GlDB BSXBJ& <50* * 3 M y t o * 12,22 mniz wx y* acaoKSRT & y*c*atroi dba mahch mmm? m m SCSI frou&tries S S O T D 9U0OB, Il, # 22St 3 li li O f M G S O0 8, 'Sf mlaUtBrBiST 6* 0*t r o#fslC(S0a22 >GFia: bau, pq.. oo. Ite eoo* 3.081 F m r e s lasting, rate P 1 C I U C SASDBL& T O B |PfC 6 3 5 3081 B b rn trle s S . F* O L S S H , IM*. # 943 `U N , 1622 garras* m m Y F*. LOCAS #G 8 6 S Complet miafag sefeet. Q Q i m i L m 'fjl iix-aL* m m s M T W ! ) O T 3 C 3 W P BOCK CO* 10 -767 # 4 0 0 0 3as & CSarawX Digging SL2 CKOHIB #SC 765 #823 Sli|fMateria! Dealers 14800 San & Orare! Digging #17X0 Crashing vzswm mz . #1433 Ore Milling mm m J.C1S3?* Smith DBA T k,|*3- Mi:c C O M C S m <30. & jUiiavi smith DBA bam sm t*v m m m e t & o r a t o #4000 Sani & Osevtit iB2B 3 U g j m & n & l DqO&t b 00. em m n R>ma? m m & m m tn e c v w? s4 fixas M i m a s X45t n Mlliag C R W URHtr.PXCm i m i Mining me* SXHKQCK & I H UBA SISEOOS & SMITH #8X96 #1X23 Sitting S0MKEB HILL S 1 S S CO, #868 #1432 Ora Milling SoSiuQwRftmAttnSoS m{.Ami X&8c*o} * u easy* #988 #1741 Bilica Crintsg . I B I O T E O CO. fise 8IS f1122 Mining T83CJUI- ^hltllS XJSC. #9C 1088 1X084. 'Osterries 1X803 Stane Gutting Albert Smith B o y II* Patterson Policy |BP 2152228 #1747 ale Mills Calif* Approved Bora #9 **<*** tr" DISEASES I^nouisoGocoatoss includi sg siileosis and asbestosis) h o t liimms & Leonidas M* Hopkins {A Copartnership) Any liability for any workmen* eoapensattoa benefits to aay employee or dependent or say cost expense or ser vice to the employer* arising frost or Incidental to industrial -lust diseases {pnetasRooenlosis ino lading silicosi a and asbesto-si) or aay aggravation thereof or thereby.* NOTICE OF HEARING A PU BLIC H EARING W IL L B B HEI/D at my office, 417 Montgomery Street, San Francisco, California, a t 10 a# m. on. June 11, 1937, to determine the effect upon the adequacy or inadequacy of workmen' a compensation insurance rates of proposed changes now on file in said office, in the classification of risks, pre. mium rates and system* o f merit rating, relating to certain occupational disease hazards. SAMUEL L. CARPENTER. JR., Insurance Commissioner of the State of California. jn 4 -lt 330 SPaunbsloismheedSitnretehte "Daily TCeolmepmheornceiaSl lNitetwers"5765 CALIFORNIA INSPECTION RATING BUREAU 114 Sansome Street San Francisco, California. July 8, 193?. BUREAU CIRCULAR #355 PMSUMOKOCOMOSIS SURCHARGE RATES. TO MEMBERS: You were advised under date of June 1st by Bureau Circular $353 of the intention to revise surcharge rates for new and renewal business effective June 1st, 1937. Yfe have today received the following notice from the Insurance Commissioner: "TO WOK IT MAY CONCERN: By virtue of authority conferred and duty imposed upon me by the provisions of Article 2, Chapter 2, Part 3, Division 2 of the Insurance Code, and after due hearing, I hereby approve as adequate for all workmen's compensation insurers admitted in the State of California, the changes in the system of classifications, rules, rates and rating plan, pertaining to the hazard of pneumonoconiosis,. all as contained in that portion of the Manual of Rules, Classifi- cations and Rates, to which this order of approval is prefixed. Said classification of risks, premium rates, system of rating and rules governing -their application as so changed are hereby approved to become effective for all new and renewal policies of workmen's compensation insurance to which they are applicable, effective on and after 12:01 a.m., June 1, 1937, and shall then, as to all new and renewal policies, supersede ail classifications of risks,'premium rates, systems of rating and rules relating to the hazard of pneumonoconiosis, in force immediately prior to 12:01 a.m., June 1, 193?. - Nothing herein contained shall be construed as in any way mod ifying or changing the rules and regulations with respect to re serves required to be maintained by insurers or with respect to reports to be made, as set forth in my Final Decision dated May 1, 1933, pertaining to the hazard of pneumonoconiosis. SAMUEL L. CARPENTER, JR. (Signed) Insurance Commissioner. " In order to expedite the release of any June policies which may have been held up wo append hereto a revised list of the surcharge classifications and rates. Numerous changes have also been made in the rating plan which should receive your careful attention. You will shortly receive a reprinted section of the Pneumonoconiosis Rules, Ratos and Rating Plan for the basic manual which will embody all of tho changes which have bean adopted and approved by the Insurance Commissioner. R. A. WHITTAKER J. Q, FROBSRG Managers TnBLE OF CLASSIFICATION LED R...TE3 PiriiTJMONOCOIilOSIS (Effective on new and renewal business June 1, 1937) Code Glassification Rate 1122 Mining-- Surface-- -- :----------- T--- ---------- - .14 1123 Kilning-- Undergnound----------------------------- .56 1452 Ore Milling----------------------------------- .35' 1463 Asphalt Work-------------------------- .63 1604 Quarries - Dimension Stone ----------------- *------- .63 1620 Quarries - Crushed 'Stone------------- ----------- --- .63 1622 Quarries-- (N.O.C.) ------------------------------ .63 A 1640 Lime Mfg.-- Inc. Quarrying--------------------------- .14 1654 Quarries-- Cement----------------------------- .14 1660 Quarries-- ICieselguhr----------------------------- .28 1710 Stone Crushing--------------------------------- .63 1741 Silica Grinding--------------- ------------------ 1.40 1747 Emery Works and Talc Mills -- ---------------- .35 1748 Abrasive Wheel Mfg. ------------------------ *---- .35 1803 Stone Cutting and Polishing----------------- ------1.26 1852 Asbestos Goods Mfg. -------------------------- r-- .74 1853 Mica Goods Mfg. -- --- ------------------------ .74 1860 Abrasive Paper or Cloth Preparation ------------------ .28 3081 Foundries-- Iron-- (N.O.C.)----- ---------------- -- .56 3082 Foundries-- Steel Castings------------------------- .56 3085 Foundries^-- Aluminum, Brass or other Non-Ferrous Metal-- (N.O.C.) ------------------- .56. 3086 Foundries-- Malleable Iron--------- *--------------- .56 3089 Pipe Mg.-- Cast Iron-- (N.O.C.) --------------:------- ,56 3091 Enameled Ironware Mfg. ----------------------------- .63 3122 Cutlery Mfg.-- (N.O.-C.) --------------------- ----- .13 F 3146 Hardware Mfg.-- (N.O.C.) ---------------- --------- .56 **F 3169 3tova Mfg. ------------------------- .56 F 3175 Furnace and Radiator or Heater Mfg. ---------------- .56 3224 Enamel or -.gate Ware Mfg. ------------------------- .22 F 3515 Textile Machine Mfg. ----------------------- ------ .56 F 3548 Printing or Bookbinding Machinery Mfg. ---------------- .56 F 3558 Boot and Shoe Machinery Mfg. --------- .------------- - .56 F 3561 Sewing Machine Mfg. --- -------------------------- .56 F 3805 Auto or Aircraft Engine Mfg. _---- .------------------ .56 F 3808 Automobile Mfg. or Assembling '---------------- .56 F 3883 Car Wheel Mfg,---------------------* 4000 Sand and Gravel Digging--------------------------- ,14 4024 Brick Mfg. -- Firebrick, enamelbrick, etc. ------------- .14 4029 Brick Mfg. -- (N.O.C.)----.---------------------- . . 1 4 4041 Earthenware or Tile Mfg. -- (N.O.C.)---------- .56 .14 TABLE CF CLACSIFICATIOH AND RBS (Continued) Code ' Classification Rate 4049 Potteries-- glazed or porcelain earthenware ------------ .28 4053 Potteries-- china or tableware----------- -- :------ -- .42 4054 Terra Cotta'Mfg. -------- --------*---- *--------- .28 4055 Potteries -- floor, wall, fireplace tile -- ----------- .28 4058 Potteries -- electrical porcelainware --------------- .41 4101 Glass Mfg. -- Polished plate glass------------------ .10 4102 Glass Mfg. -- sheet window glass ------------- ---- -- * .10 4103 Glass Mfg. -- sheet glass -- rolled -- not polished ----- .10 4111 Glassware Mfg. - no automatic machines ----- ----- ---- -- .10 4113 Glass Mfg. - cut---- ---------------------------- .10 4114 * 5469 * 5508 *** 6851 *** 6260 Glassware Mfg. -- (N.O.C.) -- -- -------------------- .10 Cleaning and Renovating outside of Bldgs. Abrasive Blasting only---- --- -----.--------------1.12 Street and Road Construction Sand and Gravel Digging -- --- --------------- ---- .14 Stone Crushing----------------- ------------ .63 Quarries,---------------------- .63 Asphalt Works----- ,,63 Tunneling -- not pneumatic------------------------ .56 -Tunneling -- pneumatic------------ --- r---------- ,,56 *** 6252 Shaft Sinking-------- .28 *** 6254 Subway Const. --------------------------------- .28 *** 6257 Caisson Work------------ ----------------- ---- ,,14 *** 6258 Caisson Work -- Foundations--- <------------- -- ---- .14 Abrasive Blasting (N.O.C.) --------------------- 1.40 Abrasive Cleansers, Polishes and Scouring Powdors ---- 1.40 Guniting----- ----------------------------- .63 A Applicable to quarry payroll only. F Applicable to foundry payroll only. ** If enameling is conducted, surcharge for No. 3224 also applies. *** Applicable only if operations involve drilling and blasting. State of California Secretary of State I, DEBRA BOWEN, Secretary of State of the State of California, hereby certify: That the attached transcript of _[33__ page(s) is a full, true and correct copy of the original record in the custody of this office. IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of California this day of April 7, 2012 DEBRA BOWEN Secretary of State Sec/State Form C E -1 0 9 ( R E V 01/2009) OSP 09 113643 SECRETARY O F STATE, DEBRA BOWEN The Original of This Document is in CALIFORNIA STATE ARCHIVES 1020 "O" STREET ________SACRAMENTO, C A 95814 ! ^5