Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1891-04-26
INSURANCE.
Speech of Hon. Alonzo WardaIl
of South Dakota On
INSURANCE IN THE ALLIANCE.
Delivered Before the Alliance Conference
at Waco Thursday Sight-First
Principles of FIRE, Marine,
Accident and Life.
Special TO the Gazette.

Special to the Gazette.
WACO, TEX, April 24-Following is the
full text of the speech on Insurance in the
Alliance" delivered before the Alliance
conference last night by Hon. Alonzo War
dali of South Dakota:
Insurance is contract of indemnity
wholly, one part y, in consideration OF
specified payment called a premium, guar
anteeing another against risk of loss.
The first principles of insurance were
understood and acted upon early in the his
tory of the race. Livy mentioned it as in
vogue during the second Punic war, and
Emperor Claudius agreed to run the risk of
loss if the merchants would engage in a
more extensive importation of corn into the
realm. There are also eXtant rules and
regulations of many guilds of the early An
glo-SaXons whereby in return for certain
contributions the members engaged to
guarantee each other against loss from fire,
robbery, flood or other damages. In 1895
the officers of the city of Barcelona issued
an ordinance relating TO maritime insur-
ance. Lord Hooper Bacon, on opening
Queen Elizabeth's first parliament alludes
to insurance in this fashion: Doth not
the wise merchant in every adventure give
part to have the rest assured?'
The first mathematical calculation on life
insurance is credited to John De Witt of
Holland, and the first insurance company
founded in England was in 1886, then
known as the Amicable'' and still in exist
ence under the name of ''Hand in Hand"
Since that date with constantly increasing
rapidity, and particularly
DURING THE PAST CENTURY,
new companies have been formed until now
there are three or four hundred powerful
companies with billions of assets and
thousands of small companies, both stock
and mutual, transacting business annually
but little inferior in extent and profit to
any single industry in the world. Perhaps
industry is not the proper word to use in
this connection, but if any of YOU have ever
had experience with a life insurance agent,
you will agree with me as TO the industry
manifested. Insurance may properly be
classed under four heads, fire, marine, acct
dent and life, carried ON by companies
formed for profit or for mutual protection.
Marine and accident, being foreign to our
present purpose, viii be passed by, al
though they occupy very important posi-
ton in the insurance world and vast sums
of money are employed in transacting their
business. The aggregation of large values
where they are exposed TO destruction by
fire, flood, storm or accident has rendered
property insurance necessary, and the
formation of families dependent in large
measure for subsistence upon the bread
winner or head of the family, has fixed a
financial value upon his or her services that
prudent people have learned TO insure as a
business investment and wise precaution
against unforeseen financial difficulties
arising from sudden death of the business
head of the family. The first requisite of
insurance is safety; the second economy.
FIRE INSURANCE.
For convenience we will separate the
subject and treat first of fire insurance.
hn nv
30 classes OF companies, stock and mutual.
The first has capital stock as basis of
credit and guarantee of stability to their
policy holders, ranging from a few thou
sand dollars up to one, two, three. and as
high as four million. This stock is intended
more as pledge OF good faith than actual
working capital, for if their business is not
conducted in such a manner as to pay losses
and expenses from the premiums received,
it is only matter of limited time when
they must wind up business, while if the
premiums are sufficiently large to cover the
losses and necessary expenses, they have
no use for the capital stock, except as q
pledge of honesty and business stability.
\ merchant might open store with
500, 600 worth of goods, all paid for, and if
MS business methods were careless. no atten-
ion paid to guard agains bad debts, or the
selling margin placed at point below cost
and expenses. failure would only be mat
er of time. Stock companies are organized
Is business enterprises purely. and for the
purpose of making money, and when well
they usually succeed in doing SO,
md we have no fault to find with them; but
IS one of the prime objects of the Alliance
S 10 learn wherein we can better ourselves
let us see how much it costs us
annually for our fire insurance and what is
lone with the money. There are reported
n the insurance year book for 1890. 6l0 fire
insurance companies doing business in the
Jnited States and Canada, 3S4 stock and
20 mutual, besides host OF county and
ownship mutualS that are not taken into
he calculation. The stock companies have
n aggregate capital OF So, 100000 and the
ash income for 1889 was $149, coo. 200, of |
which So. $40 900 was paid for losses, leay- |
ng S64, 655, 600 collected from the people in |
single year in this one line of business |
more than was needed for the purpose. 1t |
vas collected FOR, viz, the payment OF |
osses by fire to its patrons. WHAT is done |
With it! And why collected? Twelve mil |
ion, six hundred and twelve thousand dol |
ars went as dividends on the capital of |
~ 0O0,0OC nearly IA per cent, and of the |
alance S4G, 3 ;}3 3334 in expenses were charged |
p. and 49,, 00O, 900 was added to the reserve |
T in other words become the
PROPERTY OF THE STOCKHOLDERS,
nd really so far as the policy holders can |
ee should be counted as so much addi-
onal dividend, that is 80 per cent. which, |
dded to the II per cent already declared, |
rould be 80 per cent upon all the capital |
took represented in the business. In point
fact, they never do declare any such 4
ividend, and many of them have extreme
ifficulty in declaring any at all, while hun
reds of companies fail, yet the fact exists |
nat the vast amount Of premiums indicated |
re actually paid. and only the small por-
on reported to the patrons in the shape of |
'sses, and they rise to ask If it isn't paid
dividends, what is done with it, The
acitic Underwater is authority for the
blowing list of losses by fire in the United
tates and Canada for the last five years
$50. 5 ZIG, 800. COO
81. 129, 264 400
$50 13l. a49 $50 |
Total five years ...s COS, 102, SIS
verage 12l 500. SOB |
This. You viii note, is the total loss, not |
mount insured and paid for. that was but
4. 345, 600. only about two-thirds of the
IS was apparently covered by insurance,
though the premiums received, S149. 000.-
u, would have easily paid it all and left
5000 900 surplus and expense money on
50 business and S42,000,0 600 on 1890 The
nderwriter gives the following figures for
alifornia, which will apply TO any other
ate of equal population.