California has recently completed a detailed appraisal of and a related series of revisions to its workmen's compensation system which is basically self-administered and burdened with rising costs, claim settlement delays and heavy, ever-increasing litigation. Other types of administrative systems are employed in the United States, and the most successful form seems to be the direct-payment or (state) administered procedures found in Wisconsin and Michigan. These systems to date have avoided heavy litigation and achieved a prompt, accurate benefit payment record at a relatively low administrative cost. Should the California system revisions prove ineffective, the direct-payment approach should be considered. California has recently undergone something of an agonizing reappraisal of its workmen's compensation system in the hope of arriving at solutions to its alleged major shortcomings: rising volume of litigation, delays and confusion, some questionable administrative practices and procedures, and the lack of an effective vocational rehabilitation program. The real issue underlying these stated problem areas was (and still is) the rising cost of the system to all concerned relative to the benefits provided. A study commission was established in 1963 to hold public hearings, investigate the system, and make recommendations for statutory and operational revisions to the legislature. The commission carefully considered the various symptoms of trouble within the system. Some changes in the Labor Code were ultimately enacted Raymond G. Schultz, Ph.D., C.L.U., is Professor of Finance and Chairman of the Department in the School of Business Administration of California State College at Long Beach. A former Huebner Fellow, Dr. Schultz was formerly Associate Professor of Finance in the University of Southern California. This article was submitted in October. 1966. which may well alleviate them to a considerable degree, but unfortunately the main cause-the primarily self-administered nature of the system-was left substantially untouched. The purpose of this article is to explore the administrative problems of the California workmen's compensation system through an analysis of its experience and a comparison of these results with those achieved by other selected systems. If a workmen's compensation administrative system is functioning effectively, it will achieve prompt and accurate benefit payments, with minimum controversy, at a reasonable cost per compensable claim. There are no established standards on these points and data tend to be lacking particularly on the promptness and accuracy of compensation. Some conclusions, however, can be drawn from the recent experience of the California system about its administrative effectiveness. Since the California system is similar in many respects to a majority of the states and other jurisdictions in its operations and problems, it is hoped that this state's efforts and experience will be of value to those