company, and the balance were reinsurance companies writing various lines of insurance. After the declaration of a state of war, on April 6, 1917, and under the presidential proclamation of that date these companies all continued to transact their business until the 13th day of July, 1917, when by a further presidential proclamation continuation of business by marine insurance companies was prohibited. After the trading with the enemy act went into effect, on October 6, 1917, the companies continued to transact their business, and under the provisions of the act and the proclamation of the President applied to the Secretary of the Treasury for licenses. Their application for a general license was refused and there were issued to the fire and marine companies under date of November 27, 1917, special liquidating licenses by the terms of which they were permitted to continue their business solely for the purpose of liquidation under their then existing managers, and subject to the supervision of the Alien Property Custodian as to all disbursement of funds. The impossibility of completely liquidating the direct writing companies until the expiration of their policy obligations, and the running off of their business, which in the case of fire companies would mean at least five years, and in the case of life companies a considerably longer period, confronted the Alien Property Custodian. In the case of reinsurance companies, whether life, fire, marine, or accident, where the number of reinsured companies holding treaties was necessarily limited, and where such companies could be easily reached, a cancellation of the treaties or a substitution of an American company in the place of a German company with the consent of the reinsured company was comparatively easy. In these circumstances complete liquidation could be accomplished. In the case of a direct writing company, however, where many thousands of policies were outstanding in the hands of the citizens of the United States, scattered throughout the country, no complete cancellation or substitution was possible, and in the absence of special treatment there could be no complete liquidation of these companies and a transfer of their net assets to the Treasury of the United States. The several enemy and ally of enemy insurance companies continued in operation under Treasury liquidating licenses from November 27, 1917, until November 18, 1918. During that period of time the process of liquidation had not proceeded in a manner satisfactory to the Alien Property Custodian. Two companies had reinsured their business, but the others had not succeeded in reinsuring and were maintaining their offices and plants at great expense and merely permitting the business to run off. On November 18, 1918, the Treasury liquidating licenses of these companies were finally revoked, and under the Executive order of the President of November 12, 1918, the Alien Property Custodian assumed direct control of their liquidation through a manager and liquidator appointed by him for that purpose. Rapid progress has been made since that date. The business of a number of the companies, both life and fire, has been reinsured in American corporations of financial standing. Unliquidated claims and claims in litigation will require some part of the funds of these companies being held for the present by the liquidator, but the larger part of the funds will be paid into the Treasury within a few months. Besides the rapid progress in liquidation which has been accomplished by the taking over of the direct supervision and control of these companies, a very large saving has been accomplised in the matter of expense. Taking for comparison the actual rate of expense at which the companies were being operated under their former managers at the time the Treasury licenses were revoked, the present rate of expenditures shows a saving of approximately $500,000 per annum in the aggregate expense. This has been accomplished by combining offices, thereby saving the rents of expensive premises, dispensing with the services of managers, where their services were no longer required, and cutting down clerical forces, so as to leave only a sufficient number to do the actual work necessary. As the business continues to run off these expenses will be further reduced from time to time. No sale of stock or reinsurance of business is made until after the matter of adequacy of consideration, terms, and the personnel of the proposed purchaser or reinsurer has been submitted to the proper committee for their advice and the Alien Property Custodian has received their report. Workmen's compensation section. This section of the division of insurance is charged with the conservation of the rights of claim or action which, but for the war, would accrue to enemies under the compensation acts of the several States (38 now have such acts) and the collection of the compensation due when possible. The essential facts in each case are: 1. Injuries to or death of the employee as the result of an accident sustained in the course of his employment. 2. Survivorship. 3. Dependency of the survivors upon the decedent, in whole or in part, for support and maintenance. It is readily apparent that with the exception of injured employees who are interned these cases are confined to accidents which result in death. The laws of the several States require prompt reports of accidents to the industrial commissions or some proper board or bureau connected with the administration of the act, and such reports generally include information relative to the decedent's nationality, his survivors, the average weekly wage, etc., and fully describe the manner and cause of the accident. If the information thus furnished the State authorities indicates that enemy interests are involved in the case, the Alien Property Custodian is generally informally notified and supplied with the information in their files. The first notice of cases of which this office takes cognizance is often received from this source. And in this connection it may be stated that the industrial commissions and boards of the several States have, as a general rule, willingly and in a liberal spirit cooperated with this office in these matters. In many instances the Alien Property Custodian has received notice of compensation claims in which enemy interests are involved, through the Swedish consulates in charge of Austro-Hungarian interests in this country, and some times such information has been received from other and independent sources. When advised of the existence of a claim which would normally accrue to the benefit of persons who are enemies, this office endeavors to procure documentary evidence, generally in the form of bank money order receipts, showing that the survivors of decedent resident abroad were dependent upon him for support. In some instances sufficient evidence can be procured in this country to establish with reasonable certainty the fact of such dependency. If the necessary proof can not thus be procured from sources in this country, the assistance of the Swedish consulate in the proper jurisdiction is invoked to procure from abroad the official documents establishing the essential facts. These documents, consisting mainly of marriage certificates, protocols of widows, pauper's certificates, letters of guardianship, etc., are now transmitted through the State Depart ment. The compensation acts provide that claim petitions or a formal notice of claim must be filed within a certain period, generally within from three months to one year after the accident. In some instances the proceedings before the commissions and boards are initiated by the Swedish consulates which file the necessary papers, in other cases this is done under the direction of this office by the local compensation attorney. All proceedings, however, regardless of by whom the petition or notice is filed, are supervised by the Alien Property Custodian, Where possible, the employer or the insurance carrier, as may be appropriate, is induced to enter into a compensation agreement upon the basis of the information in the documentary evidence at hand. If he declines to do so, and the refusal is considered unwarranted, the documents, together with other pertinent, data are submitted to the Alien Property Custodian's compensation attorney in the jurisdiction in which the matter is pending, for prosecution or such further action as in his judgment is deemed advisable. In some States, notably Wisconsin, this office has been quite successful in obtaining awards upon the proofs procured in the manner herein stated. In other States little success has been achieved in procuring decisions in litigated cases. The decisions have not been adverse, but the cases have not been tried and concluded. They are still pending. Approximately nine-tenths of the compensation cases have not been concluded on account of the difficulty of procuring necessary proof from abroad. However, in all cases in which there is reasonable cause to believe that a right of action exists in favor of dependents who are enemies, demand is issued by the Alien Property Custodian for the right, title, and interest of such dependents in and to the compensation due, and the successful conclusion of the cases which are still pending will not be difficult when free communication can be had abroad. Proceedings have been initiated, the claims secured against the limitation provisions of the act where possible, and evidence procured which will greatly simplify and aid in the successful conclusion of the cases later. Of course, wherever possible, cases have been pressed for an award and the amount due collected. The procuring of the evidence in these cases entails a vast amount of correspondence. Endeavor is made to exhaust all sources of information in this country by communication with the employer and friends, relatives, fellow workmen, and former associates of decedent, and by these means it is frequently possible for the Alien Property Custodian to make a case. A number of the large industrial concerns of the country have organized relief associations or departments which provide for the payment of relief or death benefits to survivors of deceased employees in amounts generally ranging from $250 to $1,000. Wherever such payments have become payable in cases in which compensation is also due, the matter has been handled by this section. This section makes its own investigation and requests reports direct, an exception to the usual procedure of the organization in having such work done through the Bureau of Investigation. In a large majority (709) of the cases in which up to this date it has been possible for the Alien Property Custodian to issue demands, such demands have been for the right, title, and interest of the enemy in and to the compensation due, and no collections have been made in these cases, but in very few of them is liability denied on the merits, and successful conclusion of these cases will be a comparatively easy matter as soon as the channels for communicating abroad are fully cleared. The number of cases in which demands have been made and the money demanded, or a part thereof collected, is 289, and the amount collected is one hundred and fifty-four thousand five hun dred dollars and fourteen cents ($154,500.14). A recapitulation of the work of the section up to the close of the year 1918 follows: Amount of compensation collected, 90 cases.. Amount of relief and death benefits and unpaid wages collected, 199 cases 70, 904. 38 $83, 595. 76 Total amount collected by section............... 154, 500. 14 Number of cases in which demands have been made and money or part thereof collected: Relief and death benefits.. 199€ 90 289 Number of cases in which we have secured the right, title, and interest of enemies and most of which can be readily concluded when means of communicating abroad are fully restored (nearly all compensation cases) Number of cases undemanded..... 1. Because sufficient evidence is not yet at hand. 2. Because they are not demandable. Number of cases in course of investigation (approximately).. Total number of cases in section. RECAPITULATION AS OF FEBRUARY 14, 1919. 709 196 942 2, 136 Amount of compensation collected, 110 cases..... $96, 266.70 Amount of relief and death benefits and unpaid wages collected, 216 cases 77, 686. 37 Total amount collected by section..... 173, 953. 07 Number of cases in which demands have been made and the money or part thereof collected: Relief and death benefits... 216 110 326 Number of cases in which we have secured right, title, and interest of "enemies" and most of which can be readily concluded when means of communicating abroad are fully restored (nearly all compensation cases).. Number of cases undemanded.... This department deals with all matters involving enemy trade licenses granted by the Bureau of Enemy Trade, War Trade Board. Copies of all licenses affecting the Alien Property Custodian are received by it, and, after being given appropriate records, are routed to the trust and report involved. Upon receipt by the department of a copy of a license disclosing enemy funds or property, this department refers it to the Division of Mails and Files, and if advised by that division, with return of the copy license, that no formal report has been received, the department thereupon secures the necessary report. |