Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1877-09-26
The Farmers, Mutual.


In the forthcoming annual report Of the Far
ners Mutual Fire Insurance Company, the Direc-
tors 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 present year.
for the first time snce tn organization Of the COM
pany-a measure rendered necessary by the I'M
precedented losse' Of the past two years lin which
every other insurance company has fully shared,
80 far as our knowledge extends), the Directors
Of the Farmers Mutual see fit to accompany It's
announcement with word Of explanation, though
by no means Of apology.
quarter Of a century ago, before the business
Of fire insurance had become subject Of so much
competition and 30 often abused 1t was compara-
lively safe to estimate the per centage Of loss upon
the safest classes of property, such as the Far
mers' Mutual was chartered to insure, especially
with the assurances placed with proper prudence
and discrimination Both the soundness OF this
theory, and the wisdom OF acting upon it, Is fully
established by our experience for twenty-five
years. During that period, and little more the
ratio of loss wisely forecast that the fifteen
per cent. paid in advance was not only sufficient
to meet all the losses and expenses of the com
pany, but left a surplus in the treasury fully
equal to carrying out all the policies then in force
provided the future losses were no greater, pro-
portionately than the past. with an experience
so lengthy and so well-defned, the directors cher
ished on apparently well-grounded belief that
they had struck the golden mean, and that the
company as secure from assessments In the
future az 1t 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 com
panies without discrimination and without mercy
and which still holds on its way, until insurance
men and companies are filed with doubt and
anxiety for the future-changed the whole aspect
Of affairs. Since then 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 1, 1876, was
only sufficient to cover the losses and expenses
for three years and nine mo ths-leaving one
year and three months to be met by assess
ments. Therefore alternative was left but
to follow the provisions of the charter and assess
those members who, in paying but fifteen per
cent, failed to pay their proportion of the losses
and expenses during the time their policies were
in force. In laying the assessment, great care has
been exercised to follow both the letter and spir
of the charter and do as equal and exact justice
as possible in reaching the end sought. 1t af-
fords the Directors great pleasure to add that,
unless our future losses exceed even the present
rate (which they by no means anticipate), those
members who have insured since November /,
1876, and therefore paid twenty per cent, have
paid sufficient to meet their liabilities during the
life of their policies
We have said no word OF apology would be
offered. None is demanded Our losses are
heavy and must be paid. The charter contem-
plates this method of paying them, and makes
definite provision for the same 1t has never been
resorted to before for the sole reason that hith-
erto the advance payments have been sufficient.
While our losses have been severe, they have
probably been less, In proportion to the amount
at risk, than any other company in the state.
Unquestionably too large percentage have been
tinctured with fraud; but of what company Is
not this more true than OF the Farmers Mutual?
For certainly, its Directors have been untr-
ing in guarding against temptations to commit
fraud and in detecting and furnishing the guilty.
Witness the fact that they have, within the
past year. secured the conviction of four in
cendiaries, three OF whom are now expating their
crimes at Windsor. Including the assessment
now laid no other insurance company in existence
has furnished so cheap insurance to the people Of
Vermont as this; and no company has done
equal amount Of business without very much
larger percentage of cost. Not a dollar OF the
company's funds has been stolen, or hazarded in
speculative uses, but sacredly applied to legiti-
mate ends, according to the best knowledge and
belief of the Directors. These things being true
and we challenge even our enemies to show the
contrary-we confidently leave the present and
future interests of the company in the hands OF
those who have made trial of it for more than a
quarter Of a century