The Daily clarion. [volume] (Jackson, Miss.) 1866-1888, 1884-02-02
The Mississippi Insurance Deposit
Law and Tax.

49, " 1A0 a A2-
EDITORS CLARION: | read in Your yaf-
liable paper an article. on the subject of
the deposit law and tax on Insurance Com.
panies. SO struggling is it logic. and in
structive its statistics. that il disproves the
writer's own theory. Being on the other
side of the question. / could therefore af-
ford 10 let it pass on as generalizing
essay on that subject, without comment.
Insurance in this part of the country is not
generally very well understood. Hence
some of the writer's errors should be
pointed out.
l. He is wrong in this, that the Missis-
sippi per cent. State bonds, as q security
us of no value in the financial value of the
world Complimentary TO our good State,
that! This assertion is not based on the
present financial status of Mississippi but
on her unfortunate past, when issues of the
validity of the Planters and Union Bank
bonds divided the people. Is his assertion
true. II so. a good bank in his own town,
Columbus, stultifies itself in holding some
of these bonds, and will not part with them.
even at par, keeping them as an invest
ment and reserve. Messrs. Britton & Kuntz,
VA -NAtNAt1T a AhSAiAuAlNu VI AiAku
credit in the financial marts Of the world"
say Mississippi per cent. bonds are worth
dollar for dollar with gold and silver, and
cannot be had at a discount. Citizens of
Northern States, shrewd money lenders.
have invested in them. Experienced mon
led men in our own community have in
vested the funds of minor heirs III Missis.
sippi pr cent. bonds.
As good citizen, the author of this arti-
Gle ought not to join these of an unfriendly
latitude, in depreciating Mississippi securi.
ties.
2. He is wrong in his gratuitous advice
to the Legislature, when he says if the
State wishes TO do any reasonable thing in
the way of progress, let it take off the erro-
neously inequitable license tax of $1,000
from insurance companies, and so make il
possible for newcomers to enter upon the
same terms as those now admitted Ger
tainly all companies are required to pay
the privilege tax. Where, then is the in
equality?
This 5 900 tax is in lieu of all other
taxes, county or corporation. and opens
the doors absolutely to every village and
town in the State. When we consider the
hundreds of thousands of dollars, and mil
lions, claimed as capital by our strong com
panies, they pay no more in taxes in pro
portion than any other calling in life-the
merchant, lawyer and doctor, hotel-keeper,
undertaken, hackman.
He not only wants the 800 tax abol-
ished, but "a tar on profits" substituted.
His argument runs thus: IF an insurance
company receives in premiums in Missis-
sippi S4763.00 and pays out, in fire losses
to Mississippians, not including taxes, com
missions and other expenses. S1344600-
in word, pays out more money than it re-
ceives, is it right to charge such, any tax at
all?
OF course it is right. When the State
grants license, it does not insure the party
licensed to make money. That is the bust
ness of the licensed. A certain other
company, last year, on its Mississippi
business, made net $4,000 on premium
receipts of $4,000. Must you have one
rule for one company and another for
different company? Apply this rule to
other vacations taxed, the merchant, saloon
keeper, ETC., and the absurdity of his rule
is apparent
The author shows from documents that
in 1889, and '83 Insurance Companies !
doing business in Georgia lost $49,77O; in |
Arkansas in 1882 lost, 1905; and in |
Texas 1882 they lost $598,046. Now if the |
enormously inadequaten privilege tax of
$1,000, is to be abolished, and the tax on
profits substituted, how much revenue
would Georgia, Arkansas and Texas receive |
from Insurance Companies? And if so in |
those States, why may not the same result I
in Mississippi? A proposition of that kind, |
recommended by the gentleman, to
learned Senator, as financial reform, sin /
the direction of progress" is the climax of .
absurdity, measured by his own statistics /
Our reformer, wantingly proclaims him
self a "free trader in insurance" and wants
"the doors Of the State thrown widely open
to all honorable competitors for insur- /.
ance."
All companies "are honorable" till they |
fail. No. The $1,000 tax, and $25, 900 depos- |
it, are somewhat of protection. They keep
out shoddy companies Break down these
BARRIERS though not Alpine, and the State
would be filled with impotent companies. I
Rates would become demoralized. 30 much I
insurable property would be pretendedly
covered, with so-called insurance that fires
would reign supreme, involving good citi-
zens, and good companies with bad citizens /
and bad companies in the discriminate I
loss of thousands if not millions of proper J
ty before reformatorJ legislation could come
to the rescue. OBSERVER.
Jackson, Miss, January 81, 1884.