Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1875-07-17
FIRE INSURANCE.
Why the Alarm Telegraph Has Net
Cheapened 1t In Nashville.
Apprehension of Litigation UnderEOur
Tax Laws the Excuse.

Since the establishment of fire alarm
telegraph in Nashville, and the consequent
lessening Of risk to the fire insurance COM
panies, frequent inquiry has been made of
insurance men why they have not reduced
their rates. Property owners in the city,
after building the alarm telegraph at great
expense, thus comforting special and sub
Stantial benefit upon insurance companies,
very naturally demanded cheaper insur-
ance.
! A UNION AND AMERICAN representative
| met live insurance man the other day,
| and wanted to know why this reasonable
| demand had not been complied with. "Our
/ sole excuse lies in taxation was the re-
/ ply. Being asked to explain himself the
! insurance man made the following state
ment, which our reporter decided would be
interesting reading for the people Of Nash
| vile.
"At the last session of the Legislature,
it passed a bill, which was approved
March "a, 1875, relating to the subject of
Fire Insurance; and in the eighth section
thereof, it declared how the companies not
incorporated by this State should be taxed,
they shall at the same time pay into
! the Treasury of this State the sum of two
dollars and fifty eeuts upon each one hun
dred dollars Of said premiums (grOss pre-
miums) so ascertained, l5hich shall be IN
lieu Of all other tdJeS.'
This law is different from that of March
q, 1873, (Which was repealed in section 10
of last act), in that the former act recited
| section 3 that the companies should pay
two and half per cent on their receipts,
while it did not state that they would be
exempted from any other tax.
"The State, county and city taxes had
become so OnerOus on companies being
from Z to 10 per cent of their gross receipts
according to their business, that represent
tatiOn to this effect was made TO the men,
bers ard was agreed that if the law was
so arranged that the companies would pay
one specific tax, they would acknowledge
the act by giving Tennessee the same basis
Of rates as other States, that taxed them no
higher.
"The National Board of Fire Under
writers, at its last annual meeting, pro-
ceeded to carry cut their portion of the
agreement, as the report Of the Committee |
on Taxation will show, in these words:
"It will be due acknowledgment Of |
the advantageous reform in taxation in |
Tennes see, including, as it appears, the |
avoidance Of all local taxes whatever, to /
direct the Executive Committee TO revise /
the minimum tariff Of that State at an |
early day, as the same was so framed in |
December, 1872, as to include the various
lakes which were suffered TO exist in that /
State
"BefOre this report was adopted, how
ever, Mr.. Howard arose and said: 4 regret
to state, in regard to this matter of Ten
nessee, that a case is now pending, testing
that question as to whether the present law
relieves US of municipal taxes or not, and
therefore suggest that it would not be
wise to take any action in the matter until
that case is reached and decided with refer
ence to the reduction Of rates And, with
this explanation, the Board decided to
await the result of the suit.
"Mr. Howard was mistaken as 10 the
suit being in progress, but it was an
nOuuced that the city of Nashville would
not accept the law as passed, but would
contest the right Of the Legislature
to pass any such law. Since last
March matters have rested in this
condition. No suit has been brought
against the companies and no change of
rates has been made, nor will they be made
until it is known that no effort will be
made TO collect this city tax. All of the d.
county officers in the State seem to cOncede |
the power Of the State to pass this Law, and |
all the city officers, except in Nashville,
and it results in the citizens of the whole |
State, as well as those of Nashville, failing
to derive any benefit from this law, because
one or two men believe, on some technical
omission, they can force the companies to
pay tax which they acknowledged the
Legislature never intended should be paid.
"The companies do not believe the tax |
can be collected and they are backed in
this opinion by some Of the most eminent
lawyers in the city; but if they are to have
a lawsuit IN every city and county it will
cost as much as the tax would, and leave
them as bad of, as far as expenses are con-
cerned, rs they were under the old law.
If the City Council will order the City At
-orney not to modest the companies, it will
save the citizens much larger sum in year
y premiums, than the city will ever obtain
by an enforced and illegal collection OF
rather attempt at collection of the former '
privilege tax on insurance companies"
1t will be seen that here is a case pre-
cisely analogous 10 that which we have !
pointed out in connection with the sub ject
Of railroad taxation, it being proposed in I
Sumner county and elsewhere, 10 contest
he power of the Legislature, to permit
-ailrOads to pay into the State Treasury IA
per cent. on their gross earnings, in lieu Of