and the insurance commissioner from enforcing the law. Among other points the petition contended "that the exemption of the mills mutuals and factory associations is an unjust discrimination," and "that both legislative and executive powers are conferred on the insurance commissioner." The Court overruled all the contentions of the petition, including the two last mentioned. It took the position, to quote the opinion, that "the duties of the insurance commissioner are not legislative or judicial, but merely ministerial, and the right of the state to review insurance rates is not in issue"; and further, that "the constitution requires the legislature to enact laws to prevent agreements against the public welfare. The legislature must primarily determine what agreements are against the public welfare." In view of this decision, the hope is now freely expressed that South Carolina may follow in the footsteps of New York, Pennsylvania, and various other states, and legalize fire-underwriters' associations, at the same time, however, placing them under strict governmental regulation. Insurance Brokers' License Act Declared Constitutional.-Another event in fire insurance which has been the cause of much discussion during the year was an act passed in South Carolina on March 2, entitled "An Act to provide for the licensing of insurance brokers." One section of this Act provided that "only such persons be licensed as are residents of this state and have been licensed insurance agents of this state for at least two years." In dismissing the application of Philip La Tourette of New York for a license to do an insurance business in South Carolina under the Laney-Odom Act, the Supreme Court of South Carolina held that only those may be licensed who are residents of the state and have been licensed insurance agents for at least two years. The decision grew out of mandamus proceedings brought against the insurance commissioner by the state warehouse commissioner, who sought the issuance of a broker's license to La Tourette in furtherance of his attempt to obtain insurance for cotton stored under his charge. The complaint alleged that the law, in prohibiting the issuance of a license to non-residents, was opposed to the constitutions of both the state and the United States. Quoting the extended review of the case by the Commercial and Financial Chronicle: tends that the sole question is as to The Supreme Court in its opinion conwhether the provision in question is void on the ground that it discriminates against citizens of other states in favor of the citizens of South Carolina in violation of Section 2, Article 4 of the Federal Constitution. The opinion sets out the differentiation between "citizens" and "residents" of the state and seeks to show that under the provision in dispute citizens of the state are granted no privileges by reason of citizenship alone that may not be joyed by the citizens of any other state as freely enupon the same terms and conditions. Insurance Business for Banks.-In June the Comptroller of the Currency submitted a proposed amendment to the Federal Reserve Act, entitled "An Act to extend the corporate powers of national banks located in places without exceeding 3,000 population." According to this amendment about 2,000 national banks would be enabled to enlarge their activities by acting as agents for the placing of fire and life insurance and for the placing of real estate and farm loans in their localities. Provision is made to the effect that a bank may receive for soliciting and selling insurance such fees or commissions as may be agreed upon between it and the insurance company for which it may act as agent. Marine Insurance.-Despite great fluctuations in the hazard, owing to war conditions, the marine branch of the insurance business continued during 1915 the satisfactory progress reported for the preceding year (A. Y. B., 1915, p. 381). The extent of this progress may be judged by the showing of the 32 marine-insurance companies reporting to the Insurance Department of New York State, although it should be noted that a considerable number of fire-insurance companies also write marine risks. According to the New York report, the 32 companies had marine risks in force at the close of 1915 of $858,936,149, an increase of 1621⁄2 millions (nearly 23.3 per cent.) over the total volume of insurance outstanding at the close of 1914. This high increase tions are such as to make the continuthe expiration date... Our board of directors believes that the continuance of the War Risk Bureau by facilitating the placing of risks and by its effect on insurance rates will be most helpful to our growing merchant marine, and will place our vessels in a favorable position to compete with foreign vessels, which are granted similar protection by their various Governments. ance of the Bureau most desirable after may be contrasted with that of only | the European War, we feel that condi$678,000 in 1914 over the total at the close of 1913. Premiums received increased from $20,286,417 to $28,013,171, or over 33 per cent. Paid losses, however, unlike 1914, showed the large increase of 33 per cent., from $10,032,695 to $13,399,492. Total income increased during the year from $25,514,076 to $33,831,485, or 13.2 per cent. Despite the great increase in paid losses, the net surplus of the companies increased from $18,540,151 to $21,671,485, or nearly 17 per cent. The net surplus increased in 1915 from $16,245,643 to $18,540,151, or slightly over 14 per cent. Ac Liability and Compensation Insurance.-The extent of employers'-liability and workmen's-compensation insurance is indicated by the premiums written and losses paid by 42 companies writing liability contracts and 40 companies transacting workmen's compensation insurance. cording to the Insurance Year Book, the liability premiums of these companies for 1915 amounted to $35,537,231, and the losses paid to $22,262,841; the ratio of losses to premiums was 62.6 per cent. On workmen's-comthe premiums amounted to $31,348,758, the losses to $15,603,464, and the ratio of losses to premiums was 29.9 per cent. War Risk Insurance.-Previous issues of the YEAR BOOK have referred to the law enacted by Congress on Sept. 2, 1914, as a result of the European War, which created a Federal Bureau of War-Risk Insurance with a fund of $5,000,000 for a period of two years, designed to insure American vessels, freight and cargo when-pensation policies ever it proved impossible to secure adequate war-risk insurance elsewhere on reasonable terms (A. Y. B., 1914, In the YEAR BOOK for 1915 (p. 382) p. 368; 1915, p. 381). The results of this attempt of the Government to was presented a discussion of the raparticipate in the marine branch of pidity with which the old system of the insurance business have proved employers' liability for negligence is exceedingly profitable to the Govern- being supplanted by laws providing ment and apparently highly satisfac- for automatic compensation for intory to the shipping community. Ac-juries. At the close of 1914, it was cording to late reports, the Bureau of stated, 23 states had adopted such War Risks, during its existence of laws, and during 1915 ten more states nearly two years has yielded a net and territories were added to the list. profit to the Treasury Department of To quote Mr. Edwin W. De Leon's re$2,237,859, and in August reductions view in the 1915 Insurance Year Book: in rates were made on several classes of insurance for American vessels and non-contraband cargoes. Over 1,500 policies, representing $141,415,302 insurance, have been written; known losses total $771,329, and of this amount $58,811 has been recovered in salvage. Mention should be made also of the fact that the Maritime Association of the Port of New York has requested Congress to extend the life of the Bureau for another two years. In his communication to Secretary McAdoo, making the request, President Morrell of the Maritime Association states that: There are now 31 states with compensation laws in addition to Alaska and Hawaii, the Canal Zone and the Philiplegislature of Utah provided for a compine Islands, and the Federal laws. The mission to prepare the draft of a law and report to the next legislature. The houses which was vetoed by the GovIdaho legislature passed a law in both ernor. The Missouri commission, appointed in 1913, reported a law, as well as a bill, for an Industrial Commission, but neither of these was enacted. Kentucky, where the workmen'scompensation law was declared unconstitutional in December, 1914, it may be added, reënacted another law in March, 1916, providing for an elective system of compensation. (See measure, in view of the prolonging of also XVI, Labor Legislation.) While the establishment of this Bureau was intended as an emergency In addition to the foregoing, the fol- | Inspection Bureau, the Compensation lowing five important events should be noted in this field of insurance: (1) The decision of the Pennsylvania Supreme Court in June, 1916, upholding the constitutionality of the Workmen's Compensation Act passed in 1915. Inspection and Rating Board of New York and the insurance departments of California, Maryland, Massachusetts, New York and Pennsylvania, as well as the Industrial Commission of Wisconsin. The object of the conference was to discuss methods of compiling experience and of constructing coöperation by agencies throughout the United States in the construction of scientific compensation rates. (2) The decision of the Court of Appeals of New York State in Novem-rates, and represents the beginning of ber, 1915, holding that the New York workmen's-compensation law applies to employees of railroads engaged in interstate commerce until such time as the Federal Government enacts a workmen's-compensation law. (3) The adoption of a Federal workmen's-compensation law in September, 1916, which supersedes all existing laws relating to the compensation of injured Federal employees. The act makes provision for disability or death of civil employees of the United States resulting from personal injury sustained in the performance of duty. Two-thirds of the monthly pay at the time of injury (the total not to exceed $66.67 a month nor to be less than $33.33 unless the monthly pay is smaller) is allowed as compensation. Partial disability is compensated for at two-thirds of the difference between the monthly pay at the time of injury and the monthly wage-earning capacity following the accident, the total, however, not to exceed $66.67 a month. (See also XVI, Labor Legislation.) (4) The meeting of the Joint Conference on Workmen's-Compensation Insurance Rates in New York in September and December, 1915. At this conference were representatives of the Workmen's-Compensation Service Bureau, the Massachusetts Rating and (5) The attention devoted by the National Convention of Insurance Commissioners during 1915 to the subject of liability and compensation loss reserves. The work of the Convention's committee on reserves other than life is explained in the last report of the superintendent of insurance of New York State. "Indications are," according to this report, "that the committee will be prepared to make definite recommendations to the National Convention for new legislation in order that a bill, approved by the Convention, may be prepared in time for submission to the 1917 legislatures." Accident and Health Insurance.The following table, compiled from the Insurance Year Book, shows the premiums, losses, and loss ratios in the accident- and health-insurance business for the past eight years. Accident premiums written by 106 companies during 1915 totaled $36,977,988, an increase of only $453,176 over 1914, while the ratio of losses to premiums increased from 44.7 to 46.6 per cent. In health insurance the premium income of 49 companies writing health insurance separately totaled $7,891,030, an increase of $296,190. Fidelity Insurance and Corporate Suretyship. The results in this business for the past eight years are indicated by the following table, compiled from the Insurance Year Book: Ratio of Premiums Losses Losses to (thousands) (thousands) Premiums (per cent.) 1915. $22,732 $7,321 32.0 1914. 21,270 7,975 37.5 1913. 20,027 6,947 34.6 1912. 19,243 5,192 27.0 per cent. Considered separately, 38 companies received on their fidelity business $8,294,341 in premiums, paid losses amounting to $2,752,373, and experienced a ratio of losses to premiums of 33.2 per cent. Thirty-six companies received on their surety business $14,538,469 in premiums, paid losses of $4,569,410, and report an average loss ratio of 31.4 per cent. Miscellaneous Forms of Insurance. -The importance of the minor forms of insurance is indicated in the following table, which presents the 1915 record for the eight leading kinds of insurance coming under this heading as regards premiums received, losses The combined results in the fidel- paid, and the ratio of losses to preity and surety business during 1915 miums. Total premium income for show premiums received of $22,832,- all these types of insurance aggregat000, losses paid of $7,321,000, and ed $21,620,962, while total losses a ratio of losses to premiums of 32.1 | amounted to $7,769,441. MISCELLANEOUS INSURANCE IN THE UNITED STATES, 19151 1 Table based on Edwin W. DeLeon's discussion in the Insurance Year Book for 1916, p. A-397. XV. SOCIAL AND ECONOMIC PROBLEMS SOCIOLOGY HERBERT N. SHENTON he devotes the seventh chapter to a discussion of responsibility for conduct, in which he writes: "Beyond question different men have different degrees of capacity for mental and moral training." The lower degrees of capacity being associated with misery in all its forms, "Why go on alleviating various kinds of misery that might equally well be prevented" by having children well-born? Environment. The relations which | ters a well digested summation of the exist between the varieties and varia- general findings concerning heredity, tions (i. e., "pulsations") of climate and the behavior of the groups affected by them have been outlined and in part verified by Prof. Ellsworth Huntington in his Civilization and Climate. The study, which is a product of the new science of geography, is based upon an analysis of climate as a stimulus in determining human character (result of habitual reaction and selected structure) as expressed in civilization. The general nature of the inductive methods which he uses is to be commended. Of course there are errors due to the subjective element of judgments, limited sampling, etc., but it is the kind of work that must be done, and we must patiently eliminate the errors by the checks of successive investigations. Professor Huntington does seem to resolve the associations, or partial associations, between certain rather definite phenomena of climate and those of group behavior. The author, however, does not defend the hypothe- Adaptation. The theories regarding sis as deterministic, but remarks in the structure and behavior of social his concluding chapter: "If our hy-groups in their struggle with environpothesis is true, man is more closely dependent upon nature than he has realized," but, "a realization of his limitations, however, is the first step toward freedom." a A Critique of the Theory of Evolution, by Prof. T. H. Morgan, in addition to criticizing old evidence and appreciating and presenting new evidence, develops the thesis "that chance variation combined with property of living things to manifold themselves is the key note of modern evolutionary thought." The new evidence which Professor Morgan presents is especially valuable because of the extensive scientific experimentation from which it has been derived. ment have been examined by Prof. F. M. Bristol in a scholarly theoretical study entitled Social Adaptation. The author, influenced especially by the theories of Prof. T. N. Carver, Heredity. Continuous collective be- attempts to trace the development of havior can be better understood and the doctrine of adaptation as a theexplained and social policies deter-ory of social progress and "to indimined as we learn more of structure or tendency inheritance. The sociologist, therefore, welcomes contributions to this subject. In a well written small volume entitled Being WellBorn, Prof. Michael F. Guyer of the University of Wisconsin has defended the thesis that the right of rights of a child is that of being well-born. After having presented in six chap cate the utility of the concept of adaptation in interpreting various phases of social endeavor. Adaptation is considered both as a "state" and as a "process." The "state" in relation to a physical or material environment is described as "passive physical and physio-social adaptation"; in relation to the spiritual (including social) environment, it is |