The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1870-02-08
Ought Insurance Companies 10 be Taxed.

been directed and on which its members will
be called upon to vote before the close of tie
present session. 1t is, unfortunately, one Of
the questions on which the people generally
have not sought information, leaving The
.Who.e subject, as they do those OF law ard
medicine, to persons who devote special at
tention to them, paying the premiums When
they come around as a choice of evils, ard
claiming the privilege of grumbling when
rates are raised, the estimate of losses not I'm
to expectation, or the dividends fall short of
what was promised. A few of the members
of the Legislature have given the snb;ect
sufficient attention TO enable them to entor
urderstandingy into the discussion, while a
large majority will rely upon such evidence
as may be presented by Examiner Paine ON
the one part and those opposed to the meas
ures he recommends on the other.
AS it is proposed to tax only fore,gn COM
pAnies, by which is meant those chartered nv
other States, there will of course be no onno.
sltlon ON the part of the home companies: in
TACT they may look upon it in the light in
which some of our manufacturers regard a
high tariff We trust, however, that home
companies, as also those who are most active
In securing the passage of the act. have only
general interest in the success of the meas
ure.
The argument in favor of taxing insurance
companies is based on the assertion that large
sums are being paid annually to their stockhold-
ers,over and above fair remuneration for the
risk and interest of amount invested. If such
is the fact we see no good reason why thew
should not be taxed, applying the same rule
to home companies. This is not a question
of law and logic but of facts and figures
Have the companies which have been doing
business in this State for term of years, say
from ten to twenty, received from the busI-
ness done in Maine any more than fair re-
Enumeration? If not, what do we gain by
imposing such burdens and conditions as will
tend to drive the best of them from the State.
leaving us to rely upon the smaller and more
uncertain companies? ?" The testimony of
the Examiner, that fire companies are max
ing money out Of the business done in the
State, is based on the figures for 1868 only
Why not go back and take the two previous
yeals and make an average? The balance for
those three years would be at least S2.OOOOOO
against the companies, exhausting the profits
of any other ten years. According to the
most reliable information that can be gained
from the most authentic sources, the largest,
and best companies now doing business in
the State, taking the aggregate business done
in the State for fifteen years last past, are
several hundred thousand dollars out OF
pocket, and if they are to be taxed for the
privilege of spending that money here. it
may be the last straw that breaks the
camels back, and other and more profit
able fields will be sought for. If we
had home companies with sufficient cap-
tai to do tenth part Of the business. we
could afford to lose these companies, perhaps:
but how was it at the time of the great fire in
this city? What would have been lis copdi-
ton if we had relied upon home companies.2
While every home company having important
risks here at that time broke down, the prin-
cpal one paying but II per cent. of its losses.
foreign companies paid nearly $3.OOOOOO. In
many cases the business of the claims was not
by any means clear, yet the sympathy was SO
strong for the sufferers that few questions
were asked, and the most liberal policy adopt
ed on the part of nearly every company repre-
scented here. In but one or two cases that
came to our knowledge was an attempt made
by the companies or their agents to drive
sharp bargain, and these companies were in
tending to withdraw from the State. But for
the amount paid by foreign companies, hun
dreds OF our citizeIs would have been with
out the means of providing habitation. a
place OF business, or the necessary capital to
do business.
The Examiner makes the balance of in
come on all Fire aud Maine Insurance comma
MES OF the United States and of other conn
tries, statement of whose business appears
in the Massachusetts or New York renorts
S6,417,S00. One-half this entire surplus was
swept away in twenty hours, in Portland
alone, in 1866. On the ground that SO much
money was made by these companies in
single year is the argument based that their
entire receipts shall be taxed two per cent. in
this State, in the face and eyes of the fact
that these same companies would have been
hundreds of thousands of dollars better off if
they had never established agencies in this
State. The tax, if imposed, will be added to
the rate of insurance by those companies that
submit to it, so that what the taxpayers put
into one pocket they take out of the other.
Let us see how the case stands in regard TO
life companies. All the companies doing
business in this State, with some two or three /
exceptions, are really or virtually mutual COM
oanies. Every dollar that goes out of the
state this year in payment of premiums will |
come back to the State, or to the persons in
sured, or their representatives wherever thew
nay be, with as much certainty as that the
money paid into our savings banks will be
'ald back to the depositors or their repre-.
entatives; provided two Or three annual paw
nents are made rendering the policy thereal-
er non-forieitable. Each year the surplus
earnings OF the companies come back TO the
insured in the form of dividends, amounting
o from II to 60 per cent of the premium. The
'o''NJ "i'SA " WILL VI yCdiS NY luelt QlVlue0QS |
becoming self-sustaining. The laws of New
ork and Massachusetts as well as the safety
4 tn" insnred require the companies to re-
erye an amount sufficient to pay the present
7orth OF the policy, which they hold them
elves in readiness to do as savings bank
oids Itself IN readiness to pay, to the order of
nc oepositor, the amount of his deposit and
lterest. The fact that certain number
rop out before the second or third payment
made does hot add to the profits Of tbe
tockholders or officers OF the company. Int
dds to the divisable surplus, and anv tsx
nposed on the companies lessons bv so much
he amount to be divided among the insured
nd therefore has to be paid by the man who
endeavorng to protect his wife ard chill.
zen from poverty in case he should be taken
way or himself in his declining years in
sc adversely should cross his path and the
mings of his earlier years be swept away.
large proportion of the insured in this
at care mechanics and laboring mea who
ID 1t impossible to lay up enough to leave {
cir families in comfortable circumstances | c
case they should be taken away, and there. J
re Ihey take from their limited earnings
ougn 10 purchase the protection in life in h
rance that could not be obtained. for the b
me money elsewhere. The argument that c.