The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-12-23
Maker of Insurance Rates Was
Witness Stand Six Hours.
Explained His System Of Rate
Making to the Court.
MERELY BASIC RATE
Companies Used Tt as Base for
Making Rates.
Insurance Men Say 1909 Law
Destroys Competition.

In the suit of the state of Kansas
against 70 fire insurance companies LOT
violation Of the Sherman ANTITRUST
law by the use of the Eldridge rates
Chas E. Eldridge, the man who makes
the basic rates, just finished a six hour
term On the witness stand at noon to-
day.
His testimony is in the main rather
exhaustive explanation Of the comput-
ing of the basic rates for insurance on
the various risks in the various locail-
ties and under certain circumstances.
He explains the purpose Of MS bureau
as the compiling of these rates from
expert inspection and reports, and the
issuance of bulletins with rate and ad-
vices as to his subscribers. the insur-
ance compares.
In no instance it is the contention Of
the companies, has the Eldridge rate
been adopted as a uniform basis rate
but merely as an advisory reference In
the making of rates as 1t is the very
best inspection of conditions and COM
putation available.
Judge Hazen's Decision ON Bureau.
A contract between Eldridge and the
| insurance companies has been intro
duced in evidence by Attorney General
Jackson which is taken by the defense
| to be in their favor. This contract was
entered into subsequent to FORMER
suit of the same nature as the present
one. In 1903. Galen Nichols, county at
| t0rney, brought a suit against the COM
panies, alleging violation of the anti
trust law. Judge Hazen in the district
court held that they were in no viola
| ton of the law in the use of the
Eldridge bureau. Later. however, he
Supplemented his decision by requiring
| Eldridge to draw contract with the
| companies setting forth that he was to
supply the companies with his rates to
be used in an advisory manner in the
establishment of their rates. The con-
| tract, therefore, is considered as out
lining clearly the real purpose Of the
bureau and designating it as merely a
| reference for safe rate.
| Eldridge Denies.
| The attorney general, on the other
| hand is trying to prove that the COM
panies adopted the Eldridge rate as
their own and that there was an agree
| ment that such was to be the effect OF
| the basic rates submitted from time to
| time by Eldridge.
| Mr.. Eldridge. however answered in
the negative every such question put
to him.
Judge Thomas Bates of Chicago,
who is conducting the case for the
united companies, in cross examining
the witness brought out the fact that
by the use of the inspections and re-
ports submitted by Eldrtdge to the
! companies, these companies could, by
! applying these reports to standard
Stanford fire insurance maps OF every
city in the state determine precisely
the condition Of every house in the
city and it's fire protection as we'll as
if they themselves had inspected 1T;
emphasizing the theory that the FL
bridge bulletins were simply advisory.
In response to the question, Ed
bridge denied that his judgment had
ever in any way been interfered with
by the insurance company subscrib-
ers He also denied that there was
any agreement by which the com
panies were to adopt his rate. Fur
ther he stated that his method of
Submitting Inspections and advices
was just the same since the passage
Of the 1909 insurance law as for
merly
/ Insurance Man on Stand.
Manager McGregory of the Queen
Fire Insurance company was called
to the stand to testify as to the con-
sideration the companies accorded the
Eldridge rates. His testimony cor
responds in every particular with that
of Mr.. Eldridge. He admitted that his
company used the basis rate as sub
mitted in many instances. but replied
that he was in no way bound to do
so and did SO because the E1dridge
rate was considered the proper rate. y
He admitted. too. that his agents
often cut the rate in certain localities
where the competition was great and
that at times the rate was altogether
disregarded.
| Says 1909 Law Kills Competition.
| It was McGregor's, construction OF
the new law of 1909 that competition
was practically eliminated by the re-
quirement that all companies file their
rate with the insurance commissioner
and that he did not know how COM
petition was to be begun under thai
law. He said also that the Eldridge
rates concerned only the physical haz-
ard and had nothing to do with COM
| petition.
The weight of dispositions on hand
taken from the agents of the various
companies over the state are said te
| bear out the testimony of Eldridge
and McGregor that the Eldr1dge rates
were used simply advisory and in nc
| case were adopted as the fixed rate.
| Besides Judge Bates, the firm o.
| Houston & Brooks of Wichita, Hazer
& Cav, Mulvane & Gault, Blair &
| Scandrett, Ferry Doran & Magaw ano
| Robert Stone of Topeka are employed
in the defense, while Assistant Attor.
ney General John Marshall ano
Charles Shukers are assisting Mr.
| Jackson.
SHARP INTERSTATE HUNTERS.