The herald., 1894-12-27
INSURANCE COMPANIES At WAR
The Insurance Union Is Badly
Disrupted.
Some of the Largest Companies
Withdrawing.
Many Of the sm aler Ones Likely to Fol-
low Suit-Eate Cutting the
Order of the Day.

SAN FRANCISCO, Dec 26.-The Commercial
Union, the Fireman's Fund, Home Mutual,
Manchester, Caledonia, America, Agricultural,
Watertown, N. Y; lancashire OF Manchester.
81. Paul, Teutonia Of New Orleans and G,rard
OF Philadelphia, ins urance companies, have
given rotice that they intend to withdraw
from the Pacific Insurance union. The North
western National, the New z aland and the
Sun are involved in difficulty with the union
over the payment OF salaries to solicitors prohib-
tied by union rules, ana the Phnnix and Home
are already out OF the insurance compact.
Many agents. some representing the companies
mentioned, do not want to sband, recogniz-
ing the advantage of concurrent action. They
nave given notice or withdrawal 10 be able to
meet the rate cutting expected from those COM
panles already out OF the union. Notices OF
w1thdral are ex pected from many other compa-
MES, but extraordinary efforts are being made
to reorganize the union on new lines. Rate
cutting would diminish the profits greatly, and
would force many small companies 10 the Wall.
Ihe Pacific Insurance union has been III ex-
lstenoe Tor over 10 years. II comprises all the
so-caled "old line" fire and marine insurance
companies doing business on the Pacific coast,
most of which are eastern companies
and those of foreign birth, the latter being
organic d principally ON British and German
capital. The compact formed to facilitate
business and 10 proect the interests of the
cOmpanieE
There are two main points OF dispute. The
union makes a schedule OF rates 1t employs
corps OF surveyors, who attend 10 the classihca-
tion OF ell the cities and towns on the coast,
and who survey and elias aify every building III
every city and town where insurance is writ
ten. Rates are, of course. dete mined by the
risk assumed, and all the com panies which are
parties to the compact are bound by the rules
OF the organization not to sccept any insurance
at premiums below the fixed rae.
Some of the companies have been Offering re-
bates to secure business ard 1t was the certain
knowedge of this fact that caused Arthur Ma
gill, generarage of the Homo Insurance com
pany OF New York, and the Ph@nix Insurance
com pany of Hartford, to Withdraw from the
organization, The other point in dispute ex-
lists in the limitations of the rules which specify
what commissions and salaries shall be paid 10
the men who work for business. Hugh Craig
of the New Zealand and w. J. Landers of the
Sun were each fined $3.50 for alleged infrac-
tlons Of the rules. TheI would not pay the fine,
and pending an investigation the fines were
suspended. Ii fs generally admitted that the
fines Will not be enforced, for il is believed that
such an action on the part of the union would
Is important evidence of the instability OF the
Pacific insurance union
In the opinion of some of the leading insur-
ance men of the city the Withdrawal of the
Commercial Union, the Fireman's Fund and
the Home Mutual, viii effectually disrupt the
union. 1t will stampede the smaller compan-
les and the compact will be smashed. With
the Phoenix, Home, northwestern, CONNER
cial Union, FiremsD's Fund aud Home NJ Mutual
out of the union and the Sun and New Zealand
ready to withdraw at the slightest provocation,
the ability of the compact is sadly affected.
The disruption OF the Pacific Insurance union
will be a loss to San Francisco in more ways
than one. William Macdonald. manager of
the London and Lancashire, in speaking O. the
matter said
''Should the union become disrupted, the
protection now offered to property against loss
OF fire would be greatly decreased. The union
maintained an inspection bureau, which
offers valuable assistance to the fire marshal
Committees patrol every section of the city
and see that the provisions of the fire ordin-
ances are rgidly observed. They go through
the Chinese quarter where the inha bltanis
have a strong inclination to put stove pipe
through all kinds of fnfiammaoe material.
They see that iron ash receivers us ed in
houses throughout the city. The union en-
ploys an expert electrician to inspect the wir-
ing of buildings for lighting purposes, so to
reduce the chances of fire from electric sparks
to u minimum.
"If there is no concerted action on the part of
the insurance companies, all this work will be
dropped The fire marshal coul d not begin 10
do the work which the union is doing. The
disruption of the union will be serious loss to
the city. 1t is really to the interest and welfare
of the city that the companies should make
feir income on their business. The fire patrol
has saved the merchants of the city millions of
dollars. and should dislike to see the service
abolished. However, l do not think there is
any imminent danger of that. Even should
the union break up, believe the companies
would contribute to the support of the fire pa
troll"