St. Johnsbury Caledonian. [volume] (St. Johnsbury, Vt.) 1867-1919, 1877-10-05
The Farmers Mutual.


ladies and gentlemen.
The Farmers Mutual.
In the forthcoming annual report of
the Farmers Mutual Fire Insurance
Company, the Directors accompany the
announcement of its first assessment
with the following explanation of the
causes:
THE DIRECTORS TO THE MEMBERS.
In laying a small assessment the pres
ent year, for the first time since the or
ganizatiOn of the company measure
rendered necessary by the unprecedent-
ed losses of the past two years Tin which
every other insurance company has full
ly shared, so far as our knowledge eX
tends the Directors of the Farmers
Mutual see tit to accompany its an
nouncement with word of explanation,
though by no means of apology.
A quart er of a century ago, before the
business of fire insurance had become a
subject of so much competition and so
often abused, it was comparatively safe
to estimate the per centage of loss upon
the safest classes of property, such as
the Farmers Mutual WAS chartered to
insure, especially with the assurances
placed with proper prudence and dis
elimination. Both the soundness of this
theory, and the wisdom of acting upon
it, is fully established by our experience
for twenty years. During that
period, and little more, the ratio of
loss was so wisely forecast that the tif-
teen per cent. paid in advance was not
only sufficient to meet all the losses and
expenses of the company, but left sur
plus in the treasury fully equal to car
rying out all the policies then in force,
provided the future losses were no
greater, proportionately than the past.
With AN experience so lengthy and so
well defined, the directors cherished ON
apparently well grounded belief that
| they had struck the golden mean, and
that the company was as secure from
assessments in the future as it had been
free from them in the past. But about
the beginning of the twenty sixth year
| the tidal wave of losses, which swept
over the whole country, visiting alike
| all insurance companies without dis
elimination and without mercy-and
which still holds on its way, until in-
surance men and companies are filled
with doubt and anxiety for the future
changed the whole aspect of affairs
Since then our losses have been more
than double what they were during the
twenty-six years previous, upon the
same amount insured. AT this excessive
rate of loss the fifteen per cent. paid in
advance prior to November |, 1876, was
only sufficient to cover the losses and
expenses for three years and nine months
leaving one year and three months to
be met by assessments. Therefore NJ
alternative was left but to follow the
provisions of the charter and assess
those members who, in paying but fif-
teen per cent, failed to pay their pro-
portion of the losses and expenses dur
ing the time their policies were in force
In laying the assessment, great care has
been exercised to follow both the letter
and spirit of the charter, and do as equal
and exact justice as possible in reaching
the end sought. 1t affords the Directors
great pleasure to add that, unless Oul
future losses exceed even the present
late (Which they by no means antici.
patel, those members who have insured
since November L, 1876, and therefore
paid twenty per cent, have paid suffi
cient TO meet their liabilities during the
life of their policies.
We have said no word of apolog,
would be offered. None is demanded
Our losses are heavy, and must be paid
The charter contemplates this method
of paying them, and makes definite pro
vision for the same. 1t has never beer
escorted to before, for the sole reason
that hitherto the advance payment
have been sufficient. While our losse
have been severe, they have probabl,
been less, in proportion to the amour
at risk, than any other company in tn,
state. UnquestiOnably too large per
centage have been tinctured with fraud
but of what company is not this NOR
true than of the Farmers Mutual FO
certainly, its Directors have been un
firing in guarding against temptation
to commit fraud, and in detecting an,
Furnishing the guilty. Witness the fac
that they have, within the past year
secured the conviction of four incen
diares, three of whom are now expiatini
their crimes at Windsor. Including tn
assessment now laid, no other insuranc
company in existence has furnished s.
cheap insurance to the people of Yer
mont as this; and no company has don
an equal amount of business without
very much larger percentage of cost
Not "a dollar of the cOmpany's funds ha
been stolen, or hazarded in specnlativ
uses, but sacredly applied to legitimat
{ ends, according to the best knowledg
) and belief OF the Directors. Thes
things being true-and we chalIeng
even our enemies to show the contrar
we confidently leave the present an
future interests of the company in til
hands of those who have made trial {
it for more than quarter of centur,