Free press. [volume] (Hays, Kan.) 1888-1908, 1900-07-28
Common Errors Concerning Its Rela-
ton to the Public Brought Out by
the Investigation OF Prominent
Men in Commercial Life.

The recent annual report issued by
the Insurance Commissioner of Michi-
gan and the veto OF the valued policy
law passed by the Legislature of Iowa,
by Governor Shaw Of that state, have
called public attention to the fact that
there has been a widespread misun-
Outstanding as to the true relations
of fire insurance to public interests.
OF late property owners, aroused by
these statements from two eminent
state officials, have been giving some
thought to the subject, and the concIu
sions reached are that owing to mis-
conception of the functions and prac-
tees of fire insurance companies, as
well as to the prejudice fostered by
professional politicians who play on
the passions of the public, the people
have been standing in their own light.
AS fire insurance premiums are a
necessary part of the expense Of ev-
cry sensible business man and house
holder, it is but natural that the pub
lie should desire this item to be as low
as possible, and that a fire insurance
company should give fair and equit-
able rate.
Recent Investigations and study on
the part of several men who pay large
sums for indemnity owing to their ex-
tensive interests, have shown that the
public is taking an entirely erroneous
course in attempting to secure lower
rates regardless of all other consider
ations, and that every law intended to
compel rate reductions has in effect
caused higher rates.
The public mind looks upon fire in
surance company as a corporation, iso-
lated entirely from any human interest,
whose sole desire is to get as much
money as possible with little trouble.
The vital relationship between fire in
surance companies and every form Of
business life is unrecognized, as is its
essentially to credit and commerce.
Property to the amount of S150,000,-
600 is totally destroyed in the United
States every year. If this fell entirely
on the losers it would cause business
paralysis in hundreds Of communities.
Large plants and small enterprises
would be swept away, and the accumu-
lations and work of lifetime would be
reduced to ashes. This calamity without
any means of return would affect every
person dependent upon or having deal
ings with these various concerns.
The business man having all or a
large part of his means invested in
his daily interests could obtain but
little credit without his fire insurance
policy, his operations would be ham
pered, and if his property were de-
stroyed by fire he would in ninety-nine
cases out Of hundred be bankrupt
and unable to recoup his loss.
1t is to prevent disaster of this kind
that the fire insurance tax is collected.
A heavy loss would cripple one man,
but if properly apportioned all over
the country the loser can regain his
feet and continue. Each property owner
pays his share into the fund, and it
is distributed where losses occur. This
interdependence of human life is no
where SO nicely exemplified.
Fire insurance companies were Gre
ated to assess, collect and distribute
this fire insurance tax. 1t is a system
OF indirect taxation, necessary for the
successful conduct of business, and be
cause the tax gathering is done by
competing institutions, and is not q
government work. false ideas as to
profits on part of the companies have
been widespread.
For period of ten years (1S90-1900)
the companies have only made an aver
age underwriting profit of thirty-six
hundTedths of 1 per cent During 1898
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Even the girl who complains that
she has nothing to wear can still put
on airs