Weekly Watertown leader. [volume] (Watertown, Jefferson County, Wis.) 1908-1909, 1909-01-15

tlclpatlng and On-participating business OF
ordinary and industrial insurance. and for
voting by mail: prohibits mIsrepresentatfons
and the use of non -partiCipa ing contracts
by mutual companies; the diversion of de-
TERED dividends; RE making of So-called
board contracts, as well as the sale of
stocks and bonds with policies. and proxies
in elections by domestic mutual companies
The purpose for which these statutes
were enacted met. at the time. with nv
unqualified approval. and nothing has since
transpired which changes my opinion of
their practical value to insurance interests
Several life companies withdrew from the
state, giving as reason therefor that 4
company should not do business in a state.
the laws of which require a maximum linn
alton which includes expense factors. or
the setting aside of a specific portion of
premiums in the several policy years for
expense. | think these statutes are in the
interest of policy holders and of
great benefit in insuring the soiyencv
of life companies doing business in the
state. If, however, there is uncertainty in
the meaning of any of them as claimed by
some of the withdrawing companies, which
can be made clear. so as to remove the OBJ
1ectlOnable features thought to exist with
out affecting the essential purposes of the
laws, it would be well to do so, TO the end
that conservative companies of other states
may be willing to transact business under
them. But no sacrifice of the principle of
these acts should be made for that pur-
pose.
The failure Of the last Legislature to
life insurance has left in doubt the maxi
mum rate of interest that may be used
Besides. the organization of the new com
panieS has disclosed the deSira bilirv of a
more elastic system of valuation than that
heretofore specifically authorized by law
The bill recommended by the insurance in
vestigatiOn committee as amended ana
passed by the Assembly at the session of
1907 would make the law certain. and while
fully protecting the policyhOlders would
give the elasticity necessary to permit the
y
on an honest and solvent basis.
Complaint is made that the present law
taxing fire insurance companies results in
imposing upon our domestic companies I'M
due burdens by the operation of retaliatory
laws of other states. The law now imposes
n tax of per centum upon the gross pre-
miums received in the state, deducting
amounts paid licensed companies for re
insurance, return premiums, and actual
losses less reinsurance losses. No other
state collects its taxes upon this basis. AS
a consequence under the retaliatOry laws
of other states, our companies are com
PEELED in many states having such laws to
pay the largest amount Of taxes which can
be computed on the basis of either their
laws or our laws A REIMBURSEMENT of the
basis Of taxation to avoid this injustice to
our home companies can be made without
loss Of revenue to the state. 1t is recon-
mended that such change be made at this
session
Another matter in connection with our
insurance laws deserves consideration. For
many years our statute has authorized the
commissioner Of insurance to examine the
financial standing of insurance corporations
| applying for admission to do business in
the state: also to examine at any time all
companies doing business therein. For this
service q charge of $500 per day and trav-
cling expenses at cents per mile, is al
lowed; also compensation to be paid 10 the
commissioner by the company examined.
Formerly the commissioner was paid by
fees. Later by fees and a salary. Very
large amounts have been paid by insurance
companies to the commissioners under this
authority, and, for obvious reasons, the
practice permitted is Il bad one and should
be speedily abolished. All expense and com
penSation so collected should be paid into
the state treasury. and the commissioner re-
Quired to file his actual expense account, to
be audited and paid as other accounts are
paid by the state This will insure justice
to the companies examined and discourage
unnecessary examinations. The commits
Sioner now receives n salary of 5000 per
year. which compensation is as liberal as
that paid to any other state officer.
TAXATION.
In my message to the Legislature of 1907,
attention was called to the fact that the Ell
forts of the tax commission to assess ana
proved fanre We ars no nearer to the
goal now than we were several years ago.
Especially is this true of cash and intangi-
BILE property, which may be said prac-
parent impossibility of dealing with
credits as Il basis of taxation caused
the LldJOtlLR Oh lIlG IlN cOIlluiSSlOl III 1913
to recommend the exemption of all cred
its. This has not been done by formal leg
iSlatiye enactment, though the fact is that
all forms of credits are virtually exempt
from local taxation. This is true, also, of
money, the most substantial form of per
sOndl property.
An attempt was made in 1908 to provide
for the taxation of mortgages, but the act
II fact resulted in their exemption This
leaves the best securities not taxable while
other credits are made taxable by law. 1t
is hoped that with the Inauguration of the
system of income taxation these inequali-
ties may be TightCd and that if it shall be
found desirable TO exempt credits and
money, that the same may be reached
through the income tax. However, if mort
cages are continued to be exempted from
taxation, it requires no argument to dem
onStratC that all other forms of credit
should also be exempt. In this connection
l call your attention to 4 matter which
appears to require remedy, in some form. 1t
must be admitted at the outset that so far
as credits are concerned, they escape tax
alton, and yet in fixing the value OF the
property of the state as Il basis for the
imposition of railroad and other taxes an
nually assessed by the tax commission
millions of dollars in monies and credits
are added by the commission to the prop
crty assessed locally, on the ground solely
that large amounts of such property escape
taxation
Property not taxed in a community nee
cssariIy increases the rate paid on real and
personal property. which. in fact, is taxed
creased rate because of omitted property.
AS railroad and other corporations under
the state system are required to pay the
average rate paid by the people of the
state, it follows that if large amounts are
added by the tax commission to the prop
erty returned by the local assessors, the
result is that these corporations are di-
rectly benefited in a reduction of taxes
and that, in fact, they do not pay the
average rate paid by the people of the
state. In my opinion the statute should
be amended as to forbid additions being
based on the fact that personal property is
not reached by the local assessors. Such
power over the amount of tax to be paid
by any corporation should not be conferred
on a commission.
Another matter entitled to consideration
is the effort made by the Legislature of
1903, by the enactment of chapter 259 pro
viding a remedy. where the local assess
ment is not made in compliance with the
law, authorizing the tax commission. after
property of the district Experience has
shown that local officers do not. at all
times, in making assessments. obey the
mandate of the law, and that many local
assessments are made which have no sem
blance of justice or equity in them. This
act was designed to remedy that evil. It
was carefully urawn, and if enforced would
have been of great benefit in compelling
compliance with the law. The tax commits
sion proceeded under the statute for a
short time and caused reaSSeSSmentS in
few instances in districts where It was
shown the local assessor had not complied
with the statute. Later the commission
asked the opinion of the attorney general
as to the conStitutionality of the act. That
officer feld the act unconstitutional, as be-
ing an unauthorized interference with To-
cal self government. 1t has never been
10 nrinPlnlp