Omaha daily bee., 1906-04-01

islative matters was never sufficiently
strong 70 force its adoption. Two Philadel-
phia eompanies-the Union Surety and the
City Trust--transactng both surety and
a banking business failed disastrously,
within the past two years, and II was
thought their collapse would have induced
the desired legislation
Regularly organized and well conducted
surety companies and II most dincult 10
transact general business In the Keystone
state because OF the competition OF local
trust companies many OF whom grant In
demnity bonds to customers FOR nominal
Pittsburg institutions are particular Of
tenders
Business Not an Auuring One.
1t Is a mystery TO discerning underwrit-
ers why capitalists at the present time will
allow themselves to be persuaded into put
ting their money into new surety compan-
les. for, II they would only make an in
vestigation for themselves. as they do into
other lines Of Investment. and not rely
upon the seductive assurances Of promot-
ers, they would certainly hesitate. Can
anything be more convincing than the
official facts shown by the insurance re-
ports OF the New York state IN a table pub
lished last August by The Chronicle OF
New York? Out Of twelve companies writ
ing the bulk OF the business in America
only six had earned any surplus. since or
One company dANhoubtA lhSbA-
porated as far back as 1895 had lost In sur
plus $42s,177 and has not paid a dividend
during the past year.
Co-existent with the popular fallacy that
surety companies rarely lose money is the
popular belief that all bonds are good; and,
I'm very much the same way all mining
stock, just so the certificates are nicely en-
graved. is eagerly bought by the ignorant
and unsuspecting, so the bonds Of some
companies are accepted. regardless of their
true security 1t is to be regretted that
education does not here enter the surety
world in the form of advice or warning
from insurance commissioners, for future
developments may make the officials. who
are sworn to protect the interests Of the
people, feel very remorseful.
Bonds Are Needed.
1t may be easily shown that surety
bonds are needed and that they are re-
! quired. According to figures collected by
the Fidelity and Casualty company of
New York there were entertainments in
the United States in 1905 amounting to
over S12,0OOOO0 as against coo I'm 1904.
Deputy Auditor Pierces preliminary re-
port, which will soon make its appear
ance, will show that total of over
$4,000 was received in surety and fidelity
premiums in Nebraska last year. Bearing
out statements previously made. the fig
ures show that the losses, while only
about 16 per cent to premiums received.
were paid almost entirely by the older
companies.
After carefully digestlng these figures
the reader can scarcely fail to agree with
the writer in his opinion that only educa-
ton and adequate rates-at the present
time ends "devoutly to be wished"-can
| improve a business which should stand
beside the banking line and pay fair
returns. but which now occupies a place
as ''side-line" in many big insurance
agencies throughout the country. II in
vestors, instead of putting their money
into new companies, conducted in a man
ner contrary 10 all the dictates OF expert
ence and reason, would buy stock in older
companies which have withstood many a
hard shock, the fraternity would be much
benefited. This conclusion may seem
somewhat beside the point, but the con-
clusion is that according to present con-
dtions surety companies are not making
money and investors should beware of the
formation of new surety companies
HARRY S. BYRNE.