The times. [volume] (Washington [D.C.]) 1897-1901, 1900-06-20

Regarding Probability of ConsOli
The local insurance fight has this weel
| assumed much more serious phase ant
one that promises to end in 4 crisis The
Underwriters Association, which two
weeks ago suspended the Potomac Insur-
ance Company, now proposes to force the
fight against the Potomac by cutting the
rate of insurance premium on dwelling
| houses in the District 40 per cent, or from
$3.50 per $1,000 to S1.50 per $1,000. The
local companies which remained in the
| association when the Potomac was sus-
pended refuse to abide by this cut in
rates and threaten to resign from the
association in a body. These were the
developments of the last meeting of the
association. The meeting adjourned with
| out taking final action, another meeting
being called for day in the near future.
| 1t is hoped by the local companies that
the association will decide to give up the
Dig cut in rates or at least to modify it.
II the association holds to its first idea it
is said by those familiar with the situation
that the local companies will undoubtedly
resign. What will come after that is still
much in doubt, but there is talk of an
other underwriters association in the
near future.
Another development of the insurance
situation also Of much importance is the
talk of the consolidation of several of the
local companies. Such a project has been
under consideration for some time past,
but the present fight in the business has
precipitated the plan. 1t is said that at
least three of the prominent District COM
panies are considering the project of join
ing FORCES. These companies have not
been earning any money out of their in
surance business for some time past,
though their investments have been profit
able and have enabled them to pay good
dividends regularly. They could be liqui-
dated profitably to their stockholders
without the feature of joining forces in
one large company, but many are in favor
OF the latter project as we'll
In the way of a third DEVELOPMENT II is
limited in inner insurance circles that the
Potomac Insurance Company is likely to
Inquire in this plan by purchasing the fran
chises and properties of these companies.
Inc Potomac Company, as is known, pur-
chased the Lincoln a few months ago in
this way, and has largely increased its
scope since that time by entering the
general field outside of the District The
POTOMAC also is the company that has re-
fused to be governed by the Underwriters
Association in the recent fight and that
mas taken up an independent position out
side OF the association. The purchase of
several OF the other local concerns will. IL
is said, be in the line of these recent
steps.
1t is well known that the present in
surance rates in the District have not
proven profitable. The rates have been
low and the losses heavy, SO that the
balance sheets of many of the local COM
panies at the end of each year have shown
no profits. The proposed cut of 40 per
cent in the rate on dwelling houses would
make the balance still. further on the
wrong side. The outside companies doing
business in the District could make the
cut with very little damage comparatively
TO themselves. Their business in the Dis
trict Is only small part of their total
undertakings. The interests of the out
side concerns and of the local companies
are said for this reason to be entirely
different on the question of rate cutting.
1t is urged by Potomac Company people
that the other local companies ;hould
have stood with them from the beginning,
in the present fight, and that the outside
concerns have simply used them as cats
paws III the hope OF coercing the Potomac
They suggest that the local concerns have
nothing TO gain in the fight and every
thing to lose. The developments at the
last meeting OF the underwriters seem to
indicate that the local concerns are now
coming around to this way of thinking.
The beginning of the fight was over the
question Of multiple agencies as here
tofore stated in The Times. The outside
companies urged that 1t is not good for
the insurance business for one company
to have several agencies In one city. The
Potomac Company, On the other hand, be-
lieved that it should be allowed to have
as many agencies as it wished. The out
side companies were in the majority in
the Underwriters Association, and with
the help of all the local companies excep,
the Potomac, they were able to force
their point by adopting a rule that all
agencies over certain number should
be assessed fee Of 800 each, which, the
Potomac Company asserts. is prohibitiye
The Potomac Company refused to abide
by this rule. A few of the more important
outside concerns sided with the Potomac
in the fight. These members OF the asso-
citation were then suspended.
The fight has been at this point until
the present time. The suspended mem
DerS nave refused TO reconsider their Do
sition and the association has refused To
rescinG its order. II has been known.
however, that unless the trouble were
patched up in some fashion shortly there
would be the resort to rate Cutting. The
association as body, in fact, has as
sumed from the beginning that rate cut
ting would be necessary, though the local
have held out against any such
suggestion.
The prices of insurance stocks have been
declining recently in the local stock mar
ket, as result of the fight and on ac-
count Of the probability that there will
be rate cutting in the near future. A
block of Riggs Fire sold yesterday at Ia
and more at 3-S, which is a concession
Of nearly point from recent prices. The
high price for 1899 was Is and the low
price S. Arlington has also had a tumble
in price recently. The best bid yesterday
was 1876 and the stock was offered at 143.
Last year the price advanced to 162. and
at no time WIS it less than 40. Franklin |
IS off 5 to u points from last years prices. |
and Metropolitan is off points.
The talk OF purchases of various COM |
Danies by the Potomac is not authenticated |
by The company, but it may be |
stated on the best of authority that this |
project has been under consideration for |
some time. Among the concerns that 1t |
IS said the Potomac has under advisement |
ire the Peoples. the Riggs ard the Airing |
-on- The Metropolitan also may be taken |
INTO the plan.