The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1867-02-07
Insurance Company ENcitement-.-A
Semi-Panie among Policy Holders
in New York

Semi-Fanic among Policy Holders
in New York
From the NsJc York Hera5d.
The excitement in financial circles
for the past two days has been fur
nished by the insurance companies.
which have cOntriyed to monopoIize
the mind OF Wall street, and to tempo
rarily cast railroad squabbIes and Sec
rotary NLcCulloch's currency eccentri-
cities into the shade. The immediate
cause OF the agitation was the an
nouncement that the Sun Mutual. a
marine company, has been compel ed
to retire all its outstanding Scrip in
order 10 make good its losses. The
scrip holders, indignant at seeing heir
property thus swept away at a stroke
OF the pen, called meeting yesterday
and resolved to submit the matter to
the Superintendent of the Insurance
Bureau, with the object of forcing the
company into liquidation, and state
ments were made which reflect ed seri-
ously upon the course pursued bv the
directors. This particular case will M
doubt be subjected to very thorouUb
investigation; and in the meantime il
is well for the public to keep them
selves cool and to look calmly lint
seriously around and see whether the
insurance system generally is secure
or insecure.
The case of the Sun Mutual has two
sides. The scrip of this company has
been sold at "A very heavy discount in
some Instances as low as fifteen and
twenty per cent. Many OF the present
holders OF the scrip are therefore not
the original representatives of this nor
ton OF the capital of the company. hut
spectators, who have purchased The
certificates of profit for a nereIsonry
The right OF these mutual companies to
cancel their scrip when their losses rem
der II necessary is of course unques-
toned.
There are some features OF our pres
ent insurance system which are omen tn
serious objection. One great evil is to
pe found IN the brokerage and agency
system, which now prevail to a great
extent In order to secure business
some companies will paw ten and
niteen per cent commission 10 brokers
and agents, an amount in itself snf-
hclenr to yield a fair dividend. The
II! ms, insurance companies hire agents
IN every part of the country, and these
agents, in order to secure their com
missions, Will take risks on any buiId- |
ing not actually on fire, even IN i.
should have gunpowder manufactorv
on one side, turpentiue store on the |
othSr, ana a cellar nlled with petroleum
underneath. Heavy losses thus fan ON |
the companies through the unfaithfnI- |
ness OF their agents, while persons who 1
insure through brokers not unfre0uent1 |
~ md themselves in irresponsibIa
companies, which OF course can AFFORD !
10 pay the highest commissions TO Sc
cure business that would not come To \
them IN any other way. The only "a IA
guard for Insurers is to insure ONLY in
companies that they know to be soT,pj
ana especially TO eschew all those that
are IN the habit of paying heavy com
missions TO brokers and agents.
Another evil with all companies mo-
rine, uTe and life, Is the desire to swell
their dividend and to redeem annnaIIy
large amounts OF their certificates IF
pronts, IN order TO make a katherine
sAhioit and increase their business
mus they go on swimmingly in sea-
SOUS SOUS OF proht, but as soon as heavy
losses are sustained they have no re-
serve capital 10 fall back upon and he
come bankrupt y prudent comnanv /,
VIII always reserve n sufficient aTaii3-
Die capital IN scrip to enable it to meet
any probable run of i'll luck without
difficulty.
This, TINS viii be good time to look thor
ouShIy into our insurance system ana
TO see whether any legislative action is
needed for the better security of the
public The Superintendent of the II
surance Bureau should make il his
business TO report upon the snbisct
forthwith. Many persons beIievs H. =
the capital of all insurance comnsn;as !
like that of banks, should be mad HS'
However this may be, the laws in rsia. I
.ion 20 insurance should be thoroughly
anu If any further ssfs
guards are needed for the protsctio1 &c $
me I, IN insurer they should De supplied
ia M! ,he meantime there seems TO ba bHt
I ltiie necessity for any panic amonn n
p POI holders. The experience am0ns
1 1,% lsuFanee men is that in the marine
.siI - q season OF loss comes periodic
,e:aEs-and last year appears to bare
! a one OF these unproPitious seasons
" present no persons seem 70 baIsS I
uttered bur those who have Jr Lave i
,L"sferons years, Pocketed their profits r. r.
soLn mutual COMPANIES, and now. in
e { Of misfortune, are called 2n NJ
D bear their share of the loss. pom