The clarion. [volume] (Jackson, Miss.) 1883-1888, 1884-01-30
The Tax CT Insurance Companies
The Deposit Law-Justice and
Fair Dealing Demanded.
CoLunBus, Mss, Jan. 18Th, 1854.

The Deposit Law-Justice and
Fair Dealing Demanded.
CoLUuBus, Mss, Jan. 18Th, 1884.
Hon. E. t. sykes, Senate Chamber, Jack
son, Miss:
Sir: The fact is that il
the whole United States and for the las
ten years insurance capital has not paid Il
its stockholders an average of two per cent
upon the business of insuring property, fol
though the companies have been able to
declare larger divide1ds, they have beer
derived from their investments in stock:
and bonds which would have paid the sam'
interest without incurring the enormou:
hazard, always possible, of being totally
destroyed by fires, to property insured.
The State of Mississippi leyies an annual
tax upon Fire Insurance Companies OF
one THOUSAND DoLLAEs, a tax from i've tc
ten times larger than IS exacted by any
other civilized State or government in the
world. Ityet permits b. its entire mac,
ton to prevent the raiding upon the State
of any and all companies upon its borders
Tennessee on the North, Louisiana on the
West. and Alabama on the East, where In
surance Companies are much more numer-
ousIy represented because OF their immuni-
ty from such onerous taxation.
Our State further requires deposit, and
a deposit in MISSISSIPPI BONDS, a security
which as you well know is of no value in
the financial marts of the world.
l am told that it is proposed to admit
Insurance Companies hereafter to do bust
ness in the State upon their depositing of
United States bonds, and have only to say
that while this security would be unques-
tionable, it would be rank injustice to
those Companies that have deposited MIS-
sIssIPPI Bonds. unless it was provided in
any such legislation that the State Treasu-
rer be instructed to redeem the State bonds
on deposit at par, and the companies hav-
ing them on deposit in the Treasury be
allowed to use the funds now locked up in
such bonds, in the purchase of the United
States bonds.
You will remember that the assets of Fire
Insurance Companies are published to the
world, and are relied upon in New York as
they are III Texas. and it will need no argu-
ment to prove to you that any company
would prefer TO advertise It's assets in a
security negotiable al over the world
rather than III the promises TO pay of the
State of Mississippi.
But to redeem the bonds of Mississippi
issued for the purpose of Insurance deposits
would require an appropriation OF at least
100000, and from what l have read in the
Governors message respecting the finances
and the need for retrenchment, l have no
idea that any such appropriation could be
thought of for a moment.
should certainly expect to have you de-
mand for me as a citizen OF the State, that
if the new corners il insurance are to be
admitted upon the deposit of any other
securities whatsoever-different from those
that were demanded OF me-that my bonds
be cashed by the Treasurer, and be al
lowed the same privilege that was accorded
to any other person or corporation.
If the State wishes to do any reasonable
thing in the way of progress, let it take off
the enormously inequitable license tax of
81 900 from insurance companies and so
make it possible for new corners to enter
upon the same terms as those now ad-
nitted, and yet not have It probable that
all their income, for a year or two at least,
Tould haze to be paid in advance to the
State for the privilege of affording indem-
lity to its citizens against ruin by fire.
l am free trader by principle, and l
ihould be glad to see the doors of the State
brown wide open TO all honorable com
,etitor5 for insurance, or for any other
business, but that, am satisfied, is out of
he question for the present, owing to the |
financial condition of the State. but at |
east this thing could be and ought |
o be done: Change the license tax |
N insurance companies (Firel from |
he practical proh -bition of new capital, as
is now, to a tax upon profits. Let every |
ompany report annually to the Auditor |
he amount of its premium receipts in the /
tate of Mississippi. the amount of its
osses and the amount of the taxes, cost of
djusting losses and other expenses, includ-
ng agents commissions, actually paid to
itizens of the State, and upon the balance
It the company pay the same tax that
Their citizens pay upon their property or
usiness.
That is to say, and will give you for IL
the actual figures of the Missis-
ppi business of certain company for
lie year 1882. If an insurance company
sceives in premiums in Mississippi
4763 90 and pays out in fire losses to Mis-
ssippians, not including taxes. commits {
ons and other expenses, 13,446.00-in a
ord, pays out in the State more money in
large such ''pCblic benefactor'' any tax $
all! On the other hand, there were COM !
snies whose experience was the reverse of /
is, and such companies would be entirely t
lling to pay proportionally to their prof
in the State I
/ send you the May 18th number of the I
surance Chronicle containing the adj Q
ess of President Heald, of the National t
ri Of ! Y
arked the balance sheet he makes from
e official figures of 1882, embracing the .
tire American business of all companies c
porting to the Insurance Department of ?
w York State These show that the In
rance Companies made but little over one
ut on each hundred dollars of risks COW P
ID by them, and further that on the
emiums actually received their profit Il
$ less than one-and-one-haf per cent.
14S).
also send the October 1st number of 8
} Atlanta Vindicator, containing the off, q
! report of the Insurance Companies of
. State Of Georgia for the years 1852 and l
50 Ito April lst). d
Here results are 5
-ePremiums reed in le
Georgia in two years S2,3is,3so p
y tvSses pSA1u IN Inc
anne term .........S I,675,143 u
e expenses paid in tt
he same term 692,s7s 1855, 121 at
Ie
Leaving net loss In
Q the Companies in IA
Georgia of - { k9.77I eg
Sonislana, Mississippi and Alabama do ~
require saah statements of receipts and re
ies. bat give you the figures from the So
rial reports of Arkansas for the year
.: til
e premium receipts s 163, AS . 8
g losses paid. - 1861 26 =
'enses in the State 55,03T I'll, 163 - -
4 loss to Insurance r
Companies OF. 4 276O5
nd for Texas for 1882:
J premiums. sl,765,s4o
ses paid 81. s35 ,20s on
lenses ....-...... 528, 1872 23ea, ese Of
Leaving net less
to ms. Co.'s IN tn
Texas Of. s 59s.O46 Co
course the results in al the States an
3 not as unfavorable as those ounfa1. m.