The herald., 1898-11-16
FOREIGN CORPORATIONS
DECISION ON THE POWER TO TAX
THEM BY STATE AUTHORITY
AN INSURANCE AGENTS Wall
Wine and Brandy Receipts-Danger-
Gus Probing, an Insurance Joke
let-Notes From the North
OFFICE OF THE HERALD,

Los Angeles, Nov. 10, 1898.
A decision Of no little importance has been
rendered by the Supreme Court OF the United
States in reference to the power OF states
to tax foreign corporations doing business
within their limits. The decision was rem
dered in case instituted against the comp.
troler Of the State of New York to vacate
an assessment made on the capital OF large
western drug house having branch in New
York city The validity of the New York
law was sustained by the Supreme Court in
affirmance of the decision rendered below.
Judge Shiras, who announced the decision
of the court, said that the law was settled
that state might impose such conditions for
permitting foreign corporation to do busi,
ness within its limits as it might deem ex-
pedicnt, and that it might make the grant
dependent upon the payment of specific
license tax or sum proportioned to the
use of its capital used within the state. and
that this did not constitute discrimination
against the products of ether states. 1t may
be of interest, says Bradstreet's, to notice
that dissenting opinion was rendered by
Judges Harlan and Brown, who said that the
former decisions of the court had been uni.
form against state laws which favored domes.
tic firms, corporations or persons as against
those from other states, and that If each
state set up system of special taxes on
these outside bodies, then it would in the
aggregate amount to a sort of protective
tariff system, thus doing away with the free.
dom of trade within the United States
The followin communication to The
Herald is submitted by local fire
insurance agent. AS in its spirit it
reflects the opinions of many other
agents, besides throwing some light upon
matter with which the public is not gener.
ally familiar, it is given place in this column
"The conditions Of the insurance business
are rapidly changing and are the occasion for
much thought From the beginning of this
century until about the year 1860 it was
conducted on the same lines as any other
business. Contracts were considered bind
ing upon the assured as we'll as the com
pany, and competition was relied upon to
protect the public against exorbitant rates
or unfair requirements, and it did so effect
ually. Then we commenced to have insur-
ance departments in the states. and the office
OF superintendent in time became a politi-
cal one. Then came taxes in mild FORM
After awhile legislative interference with in
surance contracts appeared. Then additional
taxes and licenses were heaped upon the
business, and quite q number of states COM
PEELED us by law to use contracts formulated
by non-eXperts that made the loss ratio
greater. 1t will be said that this could be
regulated by the rate charged to meet the
additional expense and risk. In a sense this
might be true if the companies would unite
and form fair and equitable tariff, but we
all know from experience that, this is only
temporary expedient. Again. some Of the
states come in and pass anti-compact laws
and antitrust laws and laws doing away
with all our protective clauses. These in
references are met as well as possible, but
the truth is we do not add to the rate in the
ratio we increase the expenses. The insur-
ance men are using their best endeavors to
get every town and village to introduce
water and establish Gre departments. Where
they have these facilities we are importuning
the people to make them more efficient. Just
as fast as they comply the rates go down
This occurs when we are working through
local boards and tariffs. Thus, under the
best conditions a reduction in rates is 90.
ing on all the time and an increase in ex.
penses.
''What we are coming at is this: Where
does this condition of things leave the local
agent? With the introduction of water into
new places, the extensive sprinkler equip
ments now being used, improved construc-
tion and the general decentralization men.
toned before, his income is in many cases re-
duced so per cent from what it was with the
same volume at risk five years ago. His
first thought is to demand an increase in
commissions If the companies can make
no money at the present figures how can they
consistently add to the agents compensation,
which would make matters worse IT is plain
enough that those companies expecting TO
stay ana see the present trouble through
will not increase the blaze at the expense of
the candle. Without doubt, after awhile,
there will be an agreement as to rates, but
no one expects, whatever the advance may
be, that it will reach the average figures of
1895, and, as we have shown, the tendency
will be downward Immediately afterwards,
for the improvements already mentioned
will be still going on and substantial allow
ances must be made therefor.
THE same number of people cannot get
living out of the business as before. There
are altogether too many agents. There must
be consolidation of interests Some will
have to abandon insurance and 60 into other
business or unite insurance with other oc.
equations. In all the smaller towns and
cities this will have to be done. To all ap.
pearances it will only be in such large cities
"' Wv .oih, AHiluueipnia, boston, Cnl-
cago, st. Louis and possibly few others
that an agent can live on his income from the
business of insurance The agent who is
looking for any permanent relief from an in
crease in commissions will look in vain The
average expenses of the companies for the
year 1898 will be found greater than ever
before in the whole history of underwriting.
The burden cannot and ought not to be in.
creased"
Wine and Brandy Receipts
Receipts of wine and brandy M San
Francisco for October compare as follows:
For the first ten months of the wear the
receipts compare as follows:
1897 1sss
I