The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1903-11-24
This Subject Discussed by Well
Known Insurance Man.

In The Times-DIspatch of the 10Th OF
November was presented an Interesting
communication from Mr.. James p. Har-
rison, of Danvllle. on Municipal In
suranco. At our request prominent
surance.'' At our request n prominent
analysed the communication ana pointed
out what he conccives to be the good
features and the bad features OF Mr..
lIarrisons plan. Flo says:
rs II the suggestions Of Mr.. Harrison were
nut into effect at Richmond. for exam
pie It would probably prove. 40 he
maintains, a fortunate thing Tor the IN
suranco companies, bit might prove very
disastrous for tho public. and would not
likely be continued beyond the time Wnen
on, single year OF abnormal loss expo
riencc was sustained.
Tho public are now co-tnsurers Just
as effectively Us they would DO under
Mr.. Earrisons plan, with the single ex-
ccntion that the fire insurance tax Is
voluntarily assumed by the owners OF
property. when. under his plan, lt ~ou'd
be compulsory. Whoever undertakes 10
furnish Indemnity for loss or damage
whether it BIO the general government
the state. the municipality. or corpora
ton or individual by contract. In order
to continue such indemnity from year
to year. must be under the necessary OF
procuring, by tho levy OF n tax SUFFICIENT
to produce 1t a sum adequate TO pay DOM
the losses sustained and the expense OF
the conduct Of tho business. the tax
we're levied and collected by the gov
ernnent for the purpose OF providing IN
demnlty lust as 1t Is now levicd and COL
lected for tho expenses OF government,
there might result a slight reduction or
tn, present average cost, for the reason
that It would DO levied against all
property owned, there being much prop
erty existing not now Insured Mt al.
and It is possible, though not very proba-
Me frat governmental machinery for
COLLECTION OF tho insurance tax and ad-
iustment and payment OF Indemnity to
the extent of loss or damage sustained
nv fire might be more economical than
the expense OF the present methods.
There would be, Of course. the advan-
tage that the faith OF the whole people
nledeca was tho security for the pay.
nent of the losses, whereas now capital
nj hazard, chiefly provided through the
medium of jbint stock companies, is the
basis OF security and that capital must
be withdrawn and seek employment IN
other channels OF trade.
The arm Of government IN the WORK OF
inspection. enforcing correction. OF physl.
cal defects and prosecution for fraud
ao,,,d undoubtedly be moro effective and
produce better result than the pres
ont methods OF corporation Inspection
ana supervision,
In Ike business OF insurance no man
can ask, "Am my brothers Keeper
for tbs whole loss occasioned ny IRE,
whether happening from fraud or causes
nreyentable, or apparently beyond con-
troll. "a ultlmatel sustained, not by the
stookholder OF the insurance company,
buY Nv tho property owner whose prop
ertv remains unchanged and who seeks
Indemnity on It against loss or damnge
to him. Ills interest In the burned prop
erty is like the fellows hat N the, ex-
pense, he may not see ". DIV y . '''ote
all the same, L'...
AS n practical illustration, suppose that
Mr.. Hnrrison's plan was mad's effective
at Richmond, where the assessed Va'ue
OF the buildings Ia about $24,VUooo,' ana
tho average annual loss on buildings N
Richmond is probably not mora IMAM
sl50,0O0 The average rate on pulla'hEs
excess OF 80 cents, which rate. u apnled
by the city government, would produce
m income OF $4,000 a year-not enough
ia nav the estimated annual loss, SO, that
additional levy of tax would have 10
be paid and the present tax rate for
city purposes being A,4O, the total tax 81
buildings in Richmond would necessarily
he something In excess OF an average
rate of per cent FOR both city purposes
and fire indemnity. This would probably
work very satisfactorily so long as the
loss experience on buildings was normal
only, in the event OF any great con,
migration like that which has visited
c thH Boston, Jacksonville. Fla, and
Paterson, N. J.,ait Is very plain torsee
that Tho city would 30 out OF business,
because of the fact that there would
be no reserve from which 70 sustain the
abnormal loss.
ideas would probably accomplish much