The Sun.
London, England, 1854-01-31 00:00:00

IMPOLICY OF THE TAX.

Not only is the Fire Insurance duty unjust in principle, but its pre-
sent mode of imposition is impolitic towards the exchequer and to
the community. It is the avowed aim ofthe Government to aggran-
dise the wealth of the kingdom, and to preserve, as far as possible,
even individuals from pauperism. How much greater is its duty to
foster and encourage provident habits in the people, and to unfetter
all institutions which lead to these results. Whatever promotes the
welfare of the people, is necessarily a benefit to the Exchequer. The
Fire Brigade which saves a mass of property from destruction, pre-
serves a property to be st ll rated for revenue. The Insurance Office
that guarantees an individual from sudden ruin, preservesa taxpayer
to the State. To cast difficulties therefore in the way of Institutions
which preserve the insurer from ruin, and to impose a tax which acts
as a prohibition to insurance, is unquestionably impolitic when viewed
merely in its influence upon the Exchequer. It is holding out a
premium upon improvidence, and encouraging men to leave to chance
that safety and immunity which they might with certainty have
secured. If a man does not insure his property and a fire consumes
It, he has committed an injustice upon the community. The more

nearly then he assures his property to its real value, the more just he
is to the community. But the more he exhibits this sense of•jus:ice,
the more he is taxed by the Oovernment. Such a man is not
taxed for his wealth, but for his prudence and sense of justice. An
anomaly which admits of no defence.
OPPRESSIVE CHARACTER OF THE TAX.
- -

The oppressive nature of this duty upon Fire Insurance is also
totally disproportioned. On common insurances, the premium
charged for insuring property is Is. 6d. per cent., while the duty is
3s. per cent. This is 200 per cent. for no benefit upon what the
cflice charges for securing the property of the insurer. On artisans,
and others of the great inolustrial classes, the imposition is still
more grievous, and to them it acts as a complete prohibition of the

advantages of insurance. In one particular—that of too's of handl
craft—the sympathies of the community have very lately bee
strongly excited by the total loos of the implements of the arti

zans,-where a fire has unfortunately taken place

These men

have not only been thrown temporarily out of work, but have been
also deprived of their means of earning a livelihood, or cast on
the eleemosynary assistance of benevolent individuals. The artizan
does not require this. He_
only asks that facilities may be given
_ . . .

in, that he may insure his chest of tooli and the implements

his trade, without contributing 200 per cent. to the Governmei
for which he receives no returu whatever.
EFFECT OF THE TAX ON- INSURANCE.

The practteal effect of the tax is exhibited in the sm all amount
of property insured in comparison, both with the insurable property
of the country, and with the insured property of o her countries
where no such prohibition exists. The value of property in Great
Britain and Ireland is 4,000,000,0001.; and the value of insurable
property has been estimated at half that suns. The amount of
property insured in all the offices in Great Britain is eight hundred
and fifty millions, realising a Government revenue of 1,100.0001..
whereas the insurable amount of property in Great Britain being
estimated at 2,000,0e0,0001., would yield, if insured, a Govern-
ment duty of 3,000,0001. These returns show that one-th,rd only
of the property of the country is insured against fire. This esti-
mate is proved to be correct by the return made of fires actually
occurring.
The total number of Fires in the Metropolis in 1852 was 923. Of
this number 442 were insured for building and contents, 124 building
only, 74 contents only. Of these experience would teach us to esti-
mate that the property consumed was only insured to two-thirds of
its value. The numbers would therefore stand thus:—
Building and contents insured.. •• • • .......... 215
Building only insured.. • • • • .. • • • • 83
Contents only insured."... •• • ...... ........... 24

T0ta1...... ......... 302

It will thus be perceived that oat of 923 Fires, in only 302 instances
or less than one-third, were the parties fully insured. This is a prac-
tical evidence of the operation of the Government duty as a prohibi-
tion of Fire Insurance. We have further proof of this by comparing
the amount of property insured in Great Britain with that of other
countries. The figures stand thus :
France ........
Germany ..
United Kingdom .•..• • .. 850,090,000
The insured property of this country, by this return, is shown to be
nearly equalled in Germany, and to be exceeded by Five Hundred
and Sixty-five Millions Sterling in France.
We have here, then, a duty imposed by Government which is
shown to be unjust, anomalous, and impolitic in theOry and prin-
ciple, and in practice injurious to the best interests of the com-
munity. There is no one who would be so mad as to leave his
property, whether small or large, either uninsured or insufficiently
insured, if he had merely to pay the rates of premium which fire
insurance associations have found to be sufficient to meet the risk
incurred. It is the difference between Is. Gd. per cent. and ss. Gd.
par cent. imposed by the Government duty and the Government
stamp, which causes the most p•ovident and prudent country in
the world to leave two-thirds of its property uninsured. A pro-
gressive Government cannot suffer snch an anomaly to exit. The
tax is so unjust snd so obnoxious that efforts must be made for
its immediate repeal, or if that cannot be obtained then such a
modification of it as will remove its injurious effect upon the
community.

Mr. J. R. MTIILLOCH says—
" Perhaps the duty on Fire Insurance is the most objectionable of
existing Stamp duties. It amounts to 3s. per cent. on all property
insured; whereas the premium paid to the Insurance Office on ordi-
narily hazardous property, is no more than ls. 6d. per cent., or only
half the duty. Thus, if a person wish to insure 1,0901. on a dwel-
ling-house, a shop, warehouse, or other commonly hazardous pro-
perty, he pays 15s. to an insurance office as an indemnification for
the risk, and 30s. to Government for leave to enter into the transac-
tion So exorbitant a duty cannot be too severely condemned. It
discourages that providence and forethought, the encouragement of
which ought to be an object with all prudent Governments ; and it
is the principal cause that much property is not insured, and that
what is insured is seldom sufficiently covered. Every individual, in
fact, who insures any commonly hazardous property is obliged to
pay three times as much as the risk is really worth Under such
circumstances, the wonder certainly is, net that a great deal of pro-
perty is uninsured, but that such is not the case wills a great deal
more. Seeing the vast importance of insurance, it may well be
doubted whether it ought to be charged with any duty, however
slight. But were the duty fixed at 6d. per cent., its influence in re-
pressing insurance would not be very sensible, and the increase of
busing ss to which such a reduction of the duty would lead, would be
so very great, that we have little doubt that in a few years the re-
duced duty would yield nearly as large a revenue as is derived from
the present exorbitant duty."*

Mr. PORTER also observes—
" If it be desirable—and who can doubt that it is so ?—that al per-
sons should secure themselves from losses arising through accidents
beyond their control, it must thee be held unwise to subject laser-
ance to taxation ; and when, as in this country, the tax thus levied
amounts to 200 per cent, upon the sum required by the Insurance
offices to corer the ordinary risk from accidents by fire, the degree
of discouragement occasioned by the duty must needs be very great.
It is not only by reason of the security arising to individuals,
amounting often to the prevention of beggary, that Insurances
against fire and upon lives are beneficial ; they exercise a good effect
upon the country generally through the accumulation of savings
which they cause. The money, as it is paid to the Insurance offices,
is beneficially employed, and made to stimulate in one way or other
the industry of the nation; and when called for by the arrival of the
contingency against which the payments were meant to provide, it
is pretty certain that in a large proportion of cases the money is so
much clear gain, because witifoutvuch a resource the premiums out
of which it is provided, would have been unprofitably consumed."'"

ADVANTAGES OF THE REPEAL OF TILE TAX.
The advantages which would accrue from the repeal of the duty
on Fire Insurance are not solely that 3s. per cent. would be saved
to the insurer. A vast amount of property throughout the kingdom.
now uninsured, would then be protected in a commercial sense from
fire; and the wealth which is now consumed would be replaced. But
above all, it would lead to the insurance of the property of the poor,
and of those who are now by the slightest calamity by fire involved
in almost irretrievable ruin. It is scarcely surprising that when an
office can afford to insure property at Is. 6d. per cent„ the poor man
hesitates when he finds the premium and duty and policy together
amount to ss. 6d. Thus he leaves his property uninsured, and takes
his chance of a calamity which may never happen. Suppose in Rail-
way Insurance there were a duty of 200 per cent., howmany of those
who now seldom travel without adopting it would then avail them-
selves of the system? It is in vain to inveigh against improvidence
while our statutes actually discourage prudent forethought. There
is no reason why Fire Insurance should not be universally adopted.
There is no reason why the artisan should not insure his implements
and the servant her box of clothes—why the tradesman should not
insure to the value 'of his goods, and the rich man to the extent 0,
his possessions—save an unjust impost which makes him pay 200
per cent. for nothing.

MODIFICATION OF Viz TAX.
Although the Fire Insurance duty is unjust in principle, end In-
jurious in practice. still it is possible it may not be altogether got rid
of at once. There has been a great tendency in the Government
towards gradual repeals of any taxation, however obnoxious it might
be. It should not be so in this instance. But it has been thought
better to provide for tie alternative,—that if the repeal cannot he
effected, at least, a modification may be obtained. Hospital. infir-
maries, and farming stock, have been already exempted from this
burden. By the 7th Victoria, cap. 21, the duty on Marine lnsurayfce
was reduced. The duty on marine rsks of lees than 10s. is 3d. per
cent., the duty graduating upwards in
proportion to the premium.
It is, therefore, proposed to ask for a repeal of the Fire Insurance
duty, or that it may be greatly modified. The reduction of the
stamp on the policy from one shilling to one penny, and the re-
duction of the duty from 3s. to 6d. per cent., would not only re-
move the prohibition against fire insurance among the industrial
classes, but would lead to such an increased insurance of property
as to yield a revenue in excess of that now collected.
It must he remembered that the present rate is prohibitory—
that but one-third of the property of the kingdom is insured—that

* 31‘Culioch's British Empire (3d edition) vol. IL, page 209.
t rOrttee Popes: Of the Itetloo, Page 591.

Passages marked * are 11

'on direct,
Fore Cabin. Saloon.
To or from Gravesend and London ••••• • • • • • 10d. .. Is. 2d.
9, Gravesend and Blackwell or Woolwich Bd. •• Os. 10d.
Between Gravesend and Intermediate Piers.. 6d. .. Os. Bd.
BOAT TICKETS.—TweIve Months, 51. Os.; Six Months, 3/. Os. ;
Three Months, 21. Os.; to be had of the Collectors on board the
Packets; or of Mr. Monk, Terrace Pier, Gravesend.
Nov. 17, 1853.