The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1873-01-31
Fire Insurance.
To the Editor of the Press


maybe calle large-not to say excessive divi-
dends-to capital assuming great risks has al
ways been regarded legitimat , and so sensi-
tive is capital in this regard that it is not in
frequently induced to overstep moderate
bounds and demand extreme and sometimes
ruinously high compensation, so much so, as
to endanger its ability to continue to protect
hazards it has undertaken.
In no department perhaps, is this more
true than in that of fire insurance from which
until within comparatively recent times.
enormous, not to say extravagantly high divi-
dends have been extracted, till in times of
great loss it has been found that original CAPT.
tai stock and surplus profits are insufficient
to repay losses to those whose misplaced con-
fidence has led them year after year, to con-
tribute in the form of s'premiums" to the
well filled Golfers of such insurance companies
as had gained the public confidence.
The experience of those who suffered in
our great fire of 1866, the Chicago fire, 1871.
and that of Boston in last November, only
too surely attest the truth of what we have
mics that came to grief in those great fires
been content with moderate dividends-say
- to Is per cent per annum, and the balance
ofnet profit been placed to credit Of ''surplus''
where it should have been-it is believed
that scarcely sufferer would have been called
upon to receive percentage on the amount
of his ascertained loss. But in nearly all
cases it has been found that the surplus has
been kept at so low ebb by excessive divi-
dends declared. that any considerable confa-
grafton calls for almost universal revision OF
rates, not only in those places suffering from
such calamities, but generally.
After our fire of 1886 there was an impor-
tant revision and increase of rates here, with
more or less efforts at combination among in
surance companies doing the business to
maintain such increase, which efforts were,
however, more or less spasmodic, and rates
receded somewhat, but not to so low figure
as formerly. Again in October, 1871, ;mme-
diately after the disastrous fire in Chicago,
rates of Insurance went up agan-this time
in greater ratio, and adhered to with more GER
o"ihVJ OCSdooG VI OlOl 10 DIT COulUllldblOu
on the part of losing companies. Now again,
since the fire in Boston all important increase
in rates of premium is demanded, and
this time their maintenance fortified by
M ore determined effort at combination and
monopoly secured by an organized associa-
ton of underwriting agents in this city, con-
trolled and dictated by similar association
of underwriting companies doing business
here, styling themselves National assoca-
ton. No local agent IS allowed to depart
from the rates of premium thus imposed
on pain of FORGETTING his agency II
is but fair to say, however, that
many of our local insurance agents
are not in sympathy with these high
rates, which have been imposed by the COM
bined action of the companies they represen,.
On the other hand, they have frequently recon-
mended an increase of rates which in their
Judgment, were, under the circumstances in
which companies found themselves by Excess
sive dividends and great losses, fully adequate
to any probable future demand. But in this
matter they have been oyerruled by the higher
power of the national association; and recent
ly by a committee sent here by this associa-
ton, to rate the city, and by whom the rates
were materially increased, even after the To-
cal association had just gone through the city
and fixed upon as high rates as in their judg-
ment were necessary to meet the demands of
the future in the light of what may be regarded
as the exceptional fatality of the last few years.
And now after all this-after the local
agents have fixed the rates and their own
foreign committee has revised and increased
them, we are just informed by the National
Association that the rates of premium on all
fire risks in this city and vicinity have been
increased thirty per cent over the rates fixed
by their own committee. If there is cause
for complaint in all this is there not also
room for improvement? 1t may without
doubt, be safely relied upon that capital is
sufficiently sensitive to its own needs, to take
care of itself-and may be left to its own rem
edies. ..--.
These companies that are just now dicta-
ting such exorbtant terms to capital NAV
see an evidence of remedy to be applied
in the fact that leading capitalists and insur-
ers in this city have asked of and will be
granted by the Legislature, a charter for an
insurance company with capital of from
10000 to 100000 and in the additional
fact that Lewiston and other localities will
obtain like charters during the session.
There is no reason why there Should not be
two or three more such companies organized
in this city, since there can be no doubt but
what they would take the business at fair
rates and would be sure of sue ess. 1t is to
be hoped that all such charters will be grant.
ed and companies organized under them.
1t lisa move in theright direction, and-ene that
will inure to the benefit of capitalists who
take stock therein not less than to our citi-
zens, who will thus be afforded opportunity to
insure at home at reduced rates. Let there
be no fea.s of another such fire as that of
1866. Lightning it is said does not strike
twice in the same place, Had the 'Dirigo''
kept on in business instead of winding up, it
would long ere this have made up all the loss
es it suffered at that time.
Washington Matters.