, 1872-12-22

-oo Lit" Insurauco Dill now pcndln5 In the
Massachusetts Legislature was made the sub
ject Of an Interesting discussion few days
since, in which lion. Jt-n E..Sanford, late Com
missioner Of Insurance for Massachusetts, took
q prominent part. In his remarks, he denied
that the insurance companies Of that State had
charged too high rates, or that they had not paid
losses promptly and fully, and claimed that they
were the strongest in America. The lesson, and
the only one. which Mr. Sanford derived from
the Boston fire, was that the safety Of insurances
lies in the dispersion of risks, and that the
mistake Of the Boston companies consisted in
placing all their risks in Boston, because
they thought it incombustible, in view OF which
he protested strongly againstth effort to give to
two OF three companies in Boston the monopoly
Of the joint-Htock corporations, and commended
that general insurance law should 10 passed
which would give companies to all the larger
citiesand towns, with capital Of 100000, in
stead Of compelling companies to have
capital Of 100000, as the pending
bill proposes. OF tho wisdom of dis
pe1sing risks there can bo no doubt.
Tho fires Of Chicago and Boston have taught
that lesson most Enthusiastically. Concerning tho
other proposition, to start tho insurance busi-
ness in 6 small way, and with
capital within reach, increasing the resources
Of the company with its growth, it might be m
encouraging prospect, if it followed as matter
of course that tho company would capitalize its
profits, or that in case Of great fire, the assets
would bear any proportionate relation to the lia-
bilities. Unfortunately this has not been the
case. There are plenty Of companies in the
West which have started with small capitals,
have grown prodigiously, and paid great divi-
dends, but the resources have not increased with
the growth, and, consequently, whom the trying
time came, there was no capital behind to meet
the Losses. There ia q moral element in insur-
ance, which can rarely be tnade to
operate except by compulsory 1egisla-
ton. 1Gr. Sanford evidently recognizes
this element, by declaring ttatif these insurance
companies, started in 4 small way, succeed. then
they shall be compelled to capitalize their
profits. Under any other system, especially
under . system which allows company to
issue unlimited risks upon small capital and its
Treasurer and banker to grab its deposits ns &c.
curity for his personal losses, the economical
plan Of insurance would be an unmitigated evil.
With regard to the remunerativoness Of the in
eurance business, Mr.. Sanford presents sone
remarkable statistics. He says:
There have been altogether 400 insurance companies
chartered In Massachusetts, OF those 400 companies
300 have either found courage enough to s.nrt
in business, else rneJ have started and failed b.
fore the fire, We had only company for every four
that had been chartered. In the year 1887, John T.
B!gelow, who Was then Sacrctary Of tho Common
wealth, had the honoS Of making tho first insurance
report that was ever made so far known. II that
lime We had fortycight joint stock insurance compa-
MES in Massachusetts, and they had capital 50o
100. Last December, We had thirty-one companies,
With capital Of 100000 O; the forty-eight CON-
oanies doing business in 1897, only eleven survived
previous to the fire. and since the fire only two eur
rive. Tho experience Of insurance companies In Mas
'achuaetts Is simply this, that in one generation,
hirty five years. company out Of twenty-five sur
ives; twenty-four out OF twenty-five havo gone down.
With the capital a1 lost.