The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1875-01-03

large increase of the black insane
population during the last few years,
ls as undeniable as that all private
means OF taking care of them in thai.
condition are no longer practicable.
,nl. ---~
STATE DEPOSITS BY INSURANCE CON-
PAE1Es. President George B. Coale
has addressed the following letter to
Governor Chamberlain. relative to this
matter. and his reasons are very suits
factory, When the law was passed
several OF the principal insurance COM
pauies withdrew their agencies: -
ly>a BALTIMORE. December %, 1874.
His E:roeHency d. II. Chamberlain,
Gorernor Of South Carolina-SIR: NV
friend Judge Bond has requested me
to write to you my views as to the
policy Of requiring deposit OF capital
from insurance companies, desiring to
establish agencies for the TRANSACTION
of the business of insurance in States
other than those OF their chartered
homes' I have reason to regard such
q policy as unwise and wrong In prinoi-
pie. The security derived from such
deposit is fallaoious. as it can neees-
sarily be only Of an amount which il a
very small per centage on the amount
which the COMPANY would have at
risk; while at the same time the
sequsstration Of capital in such q man.
ner tends 70 the Weakening OF the
company and the reduction of that
aggregate amount of assets which, each
policy holder has the right to regard aa
the pledge and security of, his risk.
Or course, the demand for "a deposit
in one State begets o similar demand
in. another: and if these demands be
complied with by company to any
extent, the common security of each
State is diminished and becomes prnc
HGally limited to tho deposit held by
itself. Heavy calamities OF loss by
fire fall unexpectedly in time and
place. The State upon which q severe
loss should fall would 6nd itself seri-
ouaiy damaged in ita security by the
snnountaf 1hioh the company had.
placed elsewhere beyond it's control,
and which would be very probably
unavoidable without declaration of
bankruptcy. This, of course, is an
illustration drawn from an extended
(possibly extreme) application OF the
custom, but 1t elbows legitimately the
error OF principle upon which suoh de-
posits are required. It is al easy me
thod wheraby q weak company piay
create false idea Of it's strength,
while The companies of the LARGEST
Gi5ans aud c:css nndonhtad character
generally decline to comply with it on
principle, snd rarely or never do so
unless forced into the measure to re-
tain O long established aud valuable
business. With such companies there
is nothing gained to compensate for
the risk and expense of the safe.ksep-
ing OF their deposits.
1t is, OF course. necessary that every
company opening an agency in State
should appoint tn erein certain per.
son as its attorney. to accept service OF
process Of law. Each OF its policy
holders aas thereby the opportunity to
obtain judgment in any Of the courts
OF the State against the company. It
would be practically found easier to
execute such judgment against the
assets in control of the company at its
own Office. than to make it good
agsinst their deposits placed beyond
their eontrnl, and 30 tied up that in
any emergency they may become the
subject of many and conflicting claims.
ln word. it ia, in all respects, the in
terest Of any claimant against on in
suranoe company. (as of any creditor
against any debtor that the company
shall have in it's own hands the whole
OF its assets. The companies which do
the most widely extended business in
this country, are subjected annually in
several Of the States to q most search
ing investigation, reaching to every
part OF their business aud means.
These annual reports are widely oircu.
lated. and prove the most Trustworthy,
II not the only real security, to the com.
munity for safe and fair dealing. I
remain. with respect. your obedient
servant, ~ GEO. B. COALE.
President of Merchants Mutual In.
surauce Company. and Agent OF Fire
lnsurancs Companies.
stl-
NEW COTTON RATES. The Railroad