The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1873-01-25
SATURDAY EvEN'G. JAN. 25, 1877;
STATE INSURANCE.

SAL, 1t must be confessed, even by the JOURNAL
Itself, that if such an untoward event should oc-
chr, Ii would embarrass, if not 5reak, the State.
The question arises, in such an event, aoho DlH
i18are the insurer Whence would come the
means Of payment.-LynchbuTJ Press,
The Press Of the 21st instant, devotes
q very labored and lengthy article to the
STATE JOURNAL, in r~eioinder to Its reply
toThe Enquirer made some ten days ago or
more. We clip the above as the most
direct and palpable objection to the system
advocated by us. In fact, we met this OBJ
lection, in part, in our reply to The Enqui-
rer, saying that if there was any force in it,
it applied as well to insurance by private
companies as by the State. 1t is true that
twenty million dollars, worth of property
might be destroyed by fire in Richmond
but with the requisite number of steam fire
engines, and ar efficient fire depart
ment, it would be very unlikely
to happen by any one confiagra-
ton. But this objection is one that lies
against all insurance, and, as an evidence of
its want of validity, the fact may be stated
that the companies which were hit the worst
by the Chicago and Boston fires, have been
the most ready and willing to resume their
old risks at but a slight advance on old
rates. We referred to the Hartford
Etna,n as Hartford is one of the leading
insurance cities, and the Altna the leading
company in that city. That company was
hit to the tune of about six millions by the
Tb;,,~a G-o o,J noa William civ b,,pIraJ
thousand by the Boston fire; and yet it
paid its enormous losses out of its surplus
earnings, without touching q dollar Of its
capital stock. The net earnings of this
company are about two hundred thousand
dollars a month, and its entire amount o
premiums do not exceed those now paid by
Virginia on life policies alone. As full one.
third of its gross premiums go to pay the
expense of establishing and maintaining
agencies, and other expenses incident to
extending its business into most of the
states in the Union, as well as into the
Canadas, its gross earnings must reach at
least three hundred thousand dollars a
month, or three million six hundred thou
sand a year.
But Virginia represents in taxable values
about the one-hundredth part of all the
insurable property in the United States,
while the Hartford Etna does not secure
only about the one two-hundredth part Of
all the insurance business of the country.
1t must follow, therefore, that the amount
of business which would be done by an
Insurance Bureau in Virginia, would be
actually double that of the Etna in the
same time, or reach the advanced figures Of
seven million two hundred thousand dollars
o year. This sum is far above our original
estimate, though far below that of The
Wing, which was nearer right at first than
we were. Now, it is idle to say that if the
State can realize this magnificent in
come from fire insurance premiums alone
(tor the above estimate does not include
life policies), it cannot meet all the losses
by fire that would be likely to accrue under
the greater securities and projections
of a w~ell-guarded and judiciously
framed state law. The State could
well afford to furnish each of our
cities with a full complement of steam fire
engines, providing SIMPLY in return that
the cities should support efficient paid fire
companies to operate the machines fur
nished by the State. Ten such engines.
efficiently manned and differed in this
city, would make short work of any fire
that might occur here, long before it could
assume the proportions of a conflagration.
The only objection having any force in it,
which we have heard advanced against the
proposed Bureau, is that the State could
not afford to take the entire lines of risk
in any city of the size of Richmond that
no insurance company would do it, or think
Of doing it, except under the most reckless
system OF management. This we grant is
true in regard to the insurance companies
of the country, and must continue to be
true of them so long as they continue to
divide premiums. But giue any one COM
pany The aggregate Of all the premiums,
and as management scould jump at taking
The aggregate of risks. Nay. we venture to
say that either the Hartford H9tna or New
York Home, would not only jump at taking
these risks, but would pay a hundred million
bonus for the exclusive right to take them.
So long as our insurance companies contin-
u to divide on premiums they must divide
on risks, in order that the aggregate of
p'emisms should pay the aggregate Of
losses. But in conceding this fact, we
admit nothing that initiates against the
system of state insurance, as proposed.
The State, in taking the aggregate of all
the risks in the State, does nothing more
than the aggregate Of all the companies do
ing business in Virginia. All together, they
take the aggregate of premiums and assume
the aggregate Of risks and the fact-with
all their alleged losses in the last two
years-that they are willing to put up a
handsome bonus for the privilege of doing
business in the State, is conclusive that
they consider the aggregate of premiums
paid a handsome equivalent for the risks
incurred.
Now. the fact Is demonstrated that in.