Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1867-01-16

"
perfection IN neither, and as God does
not feed all his poor, but leaves it for US to
in part, so it seems there is set before US
the work Of n aking such system of ed
ucation as shall combine the excellenciea
of each and the faults of neither.
State Auditors Report.
The Auditor of State, in his annual
report, discusses very ably a number
of questions. The subject of Foreign
and State Insurance Companies, and
the Rates of Interest, being of general
interest, we extract from the Report
as follows;
STATE INSURANCE COMPANIES
The business of insurance has been
increased so rapidly, and so much oi
the fortunes of individuals and fami.
lies have become involved in it, as to
create great anxiety for its successful
management. The object sought in
insurance, is indemnity against losses
by fire and by food, by accident, death
&c. This is proposed to be attained
by polices of insurance, issued by cor
porations organized under the laws OF
the State, and when the proper officer
of State certifes that a corporation
has been duly organized, has shown
itself to be possessed of the capital re-
quired by law, and is therefore author
lied to transact the business for the
transaction of which it was organized,
it carries with it in some sense the
guarantee of the State, of its fitness for
the purpose it assumes to accomplish,
and of its pecunisry responsibility. It
is the duty of the State, therefore, to
see that these corporations are organ
lied with capitals so smple, and mana
ged with such skill and good faith, as
fully warrant the confidence the pub
lie is expected to put in them. AL
classes of people, old and young, in
telligent and ignorant, women and
children, must, in large measure, de-
pend upon them as their only security
aginst pauperism and want. H
By our laws, as they now stand, a
Joint stock insurance company may be
organized with a capital stock, sub
scribed, of 100000, twenty per cent
only of which need be paid up, and
the balance secured "by note, indorsed
by residents Of the State, payable on
demand" which notes are to Re paid
in such instalments and at such times
as the directors may require. The di-
rectors are also authorized "io loan, TO
invest any part of the capital stock,
money or other funds of the company
in such way as they deem best for the
safety and interest Of the stockhold-
ers." Laws should be so framed as
not only to induce honest men to en-
bark in business under them, but so as
to prevent knaves and adventurers
from assuming formal organizations un-
der them for the mere purpose of fraud
and deception. Do our statutes sufi-
GENTLY provide against fraudulent or
CARNATIONS Let US see Five resi-
dents of Ohio, who control $40, 200, or
scribe the 100000 capital stock. pay
in the $4,000, elect themselves direct
ors, indorse each others notes, and
commence the business of insurance.
They are dealing in fancy stocks, and in
vest the $4,000 in such stocks, and
change from day to day as their gam
bling emergencies may require. They
issue policies, and the money received
for premiums enables them to contin-
ue their fancy stock operations and
while money is flush and times are ia
vorable, everything goes on smoothly
with the insurance company. Adven-
turers of this character sometimes sue
ceed and get rich but what security
have the public in case of great ca
lamityi l have great confidence in
some of our insurance companies in
Ohio. A goodly number of them are
managed by gentlemen of the highest
integrity, and possess solid capital OF
some amount, judiciously invested ;
but who, outside Of the Directory,
knows how much capital they have, or
how invested? Ought not sworn re-
ports to be made TO this Office, that the
true condition of these companies may
be reported annually to the General
Assembly ? Ought not visitorial powers
to be conferred upon some State Off
Ger, T. At the reported condition of the
companies may be officially verified ?
This will prove beneficial to both insu-
rer and insured, as it will inspire conf
dence in the latter, and give stability
to the former, while it will protect the
public from imposition and drive out
of existence all fictitious and unreliable
institutions.
There are several causes of infrmity
in our present system, which will for
ever prevent our insurance companies
from attaining permanent stability and
credit abroad, though honestly mana
ged /; among which may be mentioned
first, the small amount of authorized
capital with which they are organized ;
second, the small amount required to be
paid up in money; third, the absence
of authorized official visitation and re-
liable public reports of their actual
condition.
An institution organized to transact
the business of insurance, TO be exten-
sively useful and reliable, must possess
a large cash capital. Have we nny in
surance companies that coulo stand
mistaken in the presence of such a ca
lamity as that which recently occurred
at Portland, Maine, or Quebec, Cana
da East?
Few, if any of our insurance compa-
MES have capitals equal to the respect
i've losses of several of the Boston, Hart
ford and New York companies, by the
late disastrous fire in Portland. Scarce
ly any incident could more forcibly
demonstrate the importance of strong
and large companies than that Port
land disaster. The large companies
promptly paid their losses, saved the
fortunes of those insured in them, and
are moving on undisturbed in their ca
reer of usefulness, while the small com
panies, with 100000 and $500, 900 cap
itals, lin which majority of the suff.
erers were insured, all failed, and
those insured in them are left in pow
erty and want.
Again, capital subscribed is a very
different thing from capital paid up
Prompt payment of losses is one OF the
cheif benefits of insurance. If the man
who has lost the means of supporting
his family by a sudden fire, is COMPEL
ed to wait until stock notes can be
collected, in times of monetary en-
barrassment, his policy of insurance Is
of but little value to him.
When but a small amount Of the
stock subscribed is paid up, it tends to
induce negligence of the stockholder
as to the management of the company.
IT., ,,,ar, s,,bacrihas S5 000 In the stock