The daily morning journal and courier., 1906-12-12
STATE BUSINESS MEN.
BOARD OF DIRECTORS HOLD
 DECEMBEB, MEETING,


 on subtect--RecOmmends Passage of
 Legislative Enactments-RepOrt Also
 Presented Regarding Railroad FaciIi-
 ties-Discussion on Telephone COm-
 petition.
 The December meeting of the direct
 DTS of the State Business Mems associ- ation was held in the rooms of the New Haven association in the Leffingwell building yesterday afternoon. The spe- cial committee, consisting of Andrew M. Cooper of Bridgeport, Normand F. Allen of Hartford, George E.. Barber of Derby, Andrew R. Jones of Danbury and Edward I. Atwater of this city, which was appointed to make an in- Westigation into the reasons for an ad- vance in fire insurance rates in this state, presented its report. The report details the proceedings be- tween the committee of the association and that appointed by the New Eng land Insurance exchange, which met in this city September 14. Then follows the results of the investigation. First was asked the reason for the increase in the rates, to which the answer was made, san Francisco losses. The total losses at the San Francisco fire were stated at $75,OO0,O00 divided among 131 American companies, and $57 800 GOO among thirty-two foreign companies, totaling $132 S0O,O0O," The committee states that 1t "is convinced that this great loss was due partly to poor under A writing, and partly to an act of God earthquake"
 No reductions were made in the sal 8 aries of officers, nor in home office ex- penses, but reduction was made in ' brokers commissions in several of the large cities.
 In seventeen states the use of the CO., insurance or average clauses Is restrict ed or prohibited The committee be- # lieves that the eighty per cent. clause is fair, and no recommendation of ac- # ton upon it is made. On the question < of whether the exchange Is a trust in < violation of the law, the reply is as fol- # lows:
 "The New England Insurance ex- # change is composed of the field men representing a large majority of com panies doing business in New England. VI It fixes rates, adjusts losses, or appoints q adjusters, makes the rules that govern
 the local agents, in fact gives them all < their instructions and restrictions, ex- cept as to the amount of insurance they
 shall write. It is in form voluntary # association of individual men. It Is in fact combination or trust maintaining rates and forms
 "Insurance, however, on account of I the decision of the United States su- preme court in the case of Paul vs. Vir- & ginia in 1860, is not held as a commodity 4 of trade or commerce.
 Your committee believes and rec Y ommends that you assist in bringing
 about the reversal of this decision. The
 sooner it Is re-argued under the exist
 ing conditions of business, and the de-
 elsion reversed by such new arguments, z and insurance becomes an article of
 eemmerce placed under the supervision M of the secretary of commerce and la y Dor, the more quickly will the cost of
 insurance be reduced to minimum" Regarding the profits of the under writing business the committee reports:
 We found much pertaining to" and ti specially applying to the recent ad- V vance in Connecticut, and the large ~ profits this state has paid to the insur- X, ance underwriters
 " We are told that the underwriting de- 2 oartment is unproftable The under 8 writing profits of the American com o,,ta eciV bxy ha c1INT it % ted at the fortieth annual meeting of # yhe National Board of Fire Underwrit- sers held May 10, 1906, on their United
 States business were: For forty-five # years have been 7.13 per cent. of the premiums; for twenty-five years have
 been 6.5 per cent. of the premiums; for
 len years have been 7.S per cent, of the premiums; for the year 1905 1t was # l59 per cent. of the premiums.
 In the investment department We find profits of American companies for ten wears ending December S1, 1905, were $127 ,0OO OOO
 The total combined capital of the American companies for 1905 was s60 900, 900; and for the ten years ending December 31, 1905, was about $560, 100000. Showing a profit on the total capital of 2!.7 per cent.
 We contended that Connecticut has
 been one of the most profitable fields il in the United States, and that cne ad- & vance was unjust.
 The dividends of the American com- panies combined have averaged 112S Der cent. for forty-five years exclusive K of such stock dividends as may have been paid.
 The following legislative enactments are recommended by the committed:
 To bring about a more equitable con- dition of affairs, your committee rec ommends that this association ask the
 help of officials and other organizations
 in this state and go beforethe legis-
 lature with a bill embodying the fol-
 lowing points:
 First, to prohibit companies from do- ing business in this state that risk more
 than certain percentage of their sur
 plus to policyholders in the confiagra- tion area of any city
 Second to create an insurance com mission to be appointed by the govern
 or, and to be composed of one active N merchant, one active manufacturer and H one insurance official (retired preferred)
 the merchant and manufacturer not to
 be interested in any insurance company
 In any manner other than as policy