The New York herald., 1869-03-22

great accuracy.
During the past two or three years there has been
no subject on tire insurance more thoroughly dis
cussed than the practice Of employing Insurance nc.
brokers' There are about 500 men in this city EN-
ployed in this business, and their earnings In the
year 1867 was estimated to amount to $700oOO fhey
are active wide awake ana almost omnlpresent,
and believe in the first part OF the provero, Live
and let i've" They are always on the look out to
discover when policy expires on building sv ana ra
on hand to place the risk IN some company where II
will be covered with insurance for all It Is worth
The accommodating merchant or consignee Is
too busy to attend to the matter himself, and
relies upon their representations and word for the
faithful performance Of this duty. The broker who
is only intent upon MS own commissions places the
risk In the company where he viii get the largest
commission. which is often as high rs fifteen or
twenty per cent OF the premium. and all this for
dong few minutes work, which the merchant
could send one OF his clerks to perform. To show
how ex0rbtant insurance brokerage ID IL is SUFFICIENT
to state that while merchandise brokerage varies
from one-fortetn down to onefour-hundredth OF the
amount invested In the transaction, insurance bro
kerage has risen from the enormous charge Of one
tenth of the premium, to the payment BY a
majority OF the companies OF over one
seventh, or fifteen per cent OF the amount
ana some companies are SO ignorant and reckless as
to pay 0neffth and even One-Iourth OF the whole
premium as brokerage. Any one can see that this
opens wide door for many evils. 1t greatly In
creases the cost Of insurance. lessons the dividends
OF stockholders and ultimately mpairs the capital OF
many companies. II enables On irresponsible class
OF men to place an immense amount OF insurance in
companies which are unreliable and which pay these
extravagant commissions simply to "get business"
at any cost and thereby obtain an undue advantage
over older and more reliable corporations. 1t
greatly adds 10 our insurance and increases
~ property owners Many Instances % have been known KNOWN
where broker has been qTected by customer to
place his insurance In particular company which
reported incorrectly that the company declined to
take the risk. 1t Is common practice for the bro
kers TO retain the premium in their own hands tlll
three months, and repeated instances have occurred
OF brokers failing 70 pay their premiums at all, and
the insurer has been called upon by the company
and compelled to make Q second payment on the
ground that the broker was an agent for the insurer
and not for the company There csses
became evident that the business Of fire insurance
in this city must either be entirely controlled by the
powerful an organization that they began to die
tate their own terms to the companies which could
not be disregarded with impunty, and the National
Board Of Underwriters was organized, which now
comprises about half OF the companies and agencies
In this city-the largest and most influential ones
for the purpose OF freeing themselves from the con-
troll of this class OF men and doing business In
more economical manner. II became evident that
the companies would have to pay fifteen or twenty
per cent commission for their business or have It
brought to the olce by the insurers and they chose
the latter alternative. They established the
REBATE SYSTEM,
limited to this city, which allows q rebate or repay
ment OF ten per cent, and in some cases more than
this sum, on the premiums Of all business brought
directly TO the offices OF the companies connected
with the board. Some OF the companies employ
saared solicitors and hold themselves responsible
for the business transacted bv them agents. This
rebate system is now adopted by ABOUT one-half OF
the principal companies in this city and Is rapidly
growing In public favor.
EXCESSIVE TAXATION.
The Internal Revenue law requires that one and q
half per cent OF premiums OF fire insurance and live
per cent the dividends shall be paid into the
national Treasury. 1t Is claimed with no little share
OF reason, that this tax Is unjust and burden
some beyond all precedent. Il ls tax upon The
losses and expenses well a. on the profits OF the
business. The dividends received by the st0ckhold
ers OF the New YORK state companies In 1868 were
$2,7ao,536, while the State and national taxes were
$l,25T679; that is, for every dollar received by the
stockholders dividends on their capital 459 cents
had to be paid taxes; or, If regard the taxes
and dividends the profits made from The business,
find that 3l.4 OF every dollar that Is earned in
fire insurance, not including revende stamps Is paid
in taxes and the remainder, 6S.6, Is paid to the
stockholders. The mere announcement OF this fact
is enough to show that this tax is excessive. Sup
pose that every merchant had to pay 3l.4 OF his
profits as taxes, how many would escape bank
rupteyY
BUSINESS OF 1858.
From the official returns OF the ire insurance bus
OF this state we have the following statistics up
to December 81, 1865