The Newark star and Newark advertiser. [volume] (Newark, N.J.) 1909-1909, 1909-09-17
COURT DECREE MAY
MEAN DISSOLUTION
OF FIRE EXCHANGE
Many Insurance Agents Fear
This Will Be Result of ADJ
verse Decision.
LIFE OF SALVAGE CORPS
ALSO HANGS in BALANCE
Other Underwriters Hope to Con-
tinue Organization Within
Legal Limit.


Officers of local fire insurance COM
panies and agents for good outside
companies said today that they were
surprised by the decision of the Court
OF Errors and Appeals yesterday refus-
Ing rehearing of the suit of the city
of Newark against the Newark Fire
Insurance Exchange. which was or
ganized In 1902. Some of the insurance
men declare the result of the decision
may be the dissolution of the exchange,
and ruinous city rate war such as
prevailed before the exchange was or
ganized TO make a standard premium
rate for all companies.
But older men said that as they un-
derstand 1t, the companies in the ex-
change are only prohibited from enter
ing into an agreement to fix rates at
certain figure, and that the exchange
can continue in existence to make in
spections of fire hazards and do other
things IL has right to do under the
law. An old insurance man said he
] hoped, no matter what happens, that
| the Salvage Corps may be maintained
| by the fire insurance companies for the
protection of property. IL majority
|
voted against supporting the Salvage
Corps, he said, it would have to be dis
continued.
Daniel II. Dunham, president of tho
Firemen's Insurance Company said
| that meeting of the exchange will be
called when the president, Ross M,
| WiclSham, returns from his vacation,
to consider the situation with Richard
| V. Lindabury, counsel for the exchange.
The decision reverses that of Vice.
Chancellor Stevens" said Mr. Dun
ham, "and declares the fixing of rates
by an agreement between the COM
panies Illegal. There Is no doubt that
our exchange Ia now debarred from
making fixed premium rate by agree
ment But, the organization. as I
understand 1t, can be continued for the
inspection of buildings, seeing that
policies are made out in proper form
and for various other things the ex
change has a legal right TO do. There
may be rate war started by weak
companies, but l believe the strong
companies that are able to pay heavy
fire losses will keep to good premium
rate.
Few Objections to Rate.
i when the exchange was organized
and a uniform rate made for all the
companies there was complaint But
since then we have heard very few OBJ
jections to the premium rate as being
high. The public did not make the
attack upon the exchange. The people
we have insured are satisfied, because
we make reduction in the rate when
risks are improved
"The rate in Newark and vicinity
is lower than in most cities, and this
Is due to the work of the exchange,
for 1t worked hard to have the hign-
pressure water service introduced here
to protect property, and thereby cause
a reduction in premiums. The exchange
has also encouraged people to make
improvements as a protection against
r fire, and this has benefited the whole
, city. No agent of a weak or rrsspon-
, sible company Is a member of our or
ganiZation.'
George c. Plume. who was for two
years president of the exchange, said:
THE decision as | understand it, pre-
? vents fire companies from entering into
. an agreement to charge any particular
rate The exchange work for the in
, PRODUCTION here of the high pressure
water system, and that service caused
reduction of 10 per cent, in rates.
!, The exchange should be credited With
improvement in the electric light sys-
TEN in the wiring of buildings and in
= other ways, which resulted in the re-
duction of electric light hazards to a
! minimum.
q The demand of the exchange for the
Improvement of all fire risks has re-
suited in a reduction In fire losses and
corresponding reduction in rates.
, understand the right of the exchange
to survey and supervise fire hazards
will be retained, but the agreement to
charge the rate comDiled by the ex-
change is denied by the court.
"The companies, of course, respect
the law. but they will undoubtedly take
some action to preserve to the com
q panies the great benefits which the
G methods of the exchange are responsi-
= bic for and which have resulted in a
! diminution of fire waste, reduction in
a the premium charged and a uniform
rate of premium by all companies, local
a and foreign 1t Is hoped that whatever
. happens that the Salvage Corps will be
continued and supported by the fire
q companies"
"'The exchange offered special induoe-
ments for property owners to improve
their buildings against fire and get a
reduction on premium rates." said
Phileman e. L. Hoadley president OF
the American Fire Insurance Com
pany. I'VE induced manufacturers
. and merchants to put electric fire Sig
nails in their places Of business, SO that
In case of fire an alarm can be sent
+ out in a few seconds, thereby reduc-
, ing the fire hazards. Our company
: has not had complaints about the rate
from any people We have insured.
They are satisfied with the rate
"If it is illegal for the Newark ex-
change to agree upon a uniform rate
the decision affects every organization
of FIRE insurance companies In New
! Jersey The substantial companies THAI
always pay fire losses promptly Will.