Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1911-02-05
A rwo-slpED PROPOSITION.

A 1WO-SlOeO TnOTOo'''ON'
The following editorial from the La
Moure County Chronicle Oh the nsur-
ance bill that is before the legislature
at the present time is of particular in
terest on account of the fact that the
editor of the Chronicle, w. G. Taylor,
is present state insurance commission
er:
A bill is now pending before the
legislature whose character makes it
of considerable interest both to insur-
ance companies, which, it is designed
to affect, and also business men and
the public in general. The bill, as we
understand it, provides that when the
premiums collected by any insurance
company in a given county aggregate
$1,000, 50 per cent thereof must be
invested in first mortgage loans, or
other approved property. In other
words, insurance. companies would be
compelled to invest large proportion
of their profits, that is the difference
between death losses and premiums
paid. in the state i'll which they are
doing business. AT first blush it would
be natural to say: Yes. good thing:
make the insurance companies invest
their profits in the state from whence
they draw them But there are other
considerations which make us pause
not for reply-but to ana yze the Sit
,,ation and see whether the law would
On The whole be beneficial. Two points.
two issues. if you please, stand out
which must be considered One is that
the insurance companies would be COM
PEELED to invest heavily in real estate
loans. at first thought, apparently a
gifted ged proposition. But the point
is that while real estate is safe, it is
slow; while land is good security, farm
lands are difficulty negotiable They
are not quickly bartered and sold i'll
the money market. money is not easily
and speedily realized upon farm mort
cages in comparison with other negotia-
bic values in the money market. Hence
in time of panic, sudden fnar-
cial depression or other urgent ncces-
sity where companies would be hard
pressed to realize money to meet the
demands of shareholders, insurance
companies with their funds heavily in
vested i'll farm loans would be placed
III a position Of great financial emba:-
rassment, holding securities upon
which they could not speedily realize
money to meet the exigencies of fnan-
c'al Strlngency. The shareholders would
suffer- The fact that national banks
are not permitted to make farm loans
is significant in showing the attitude
which federal regulation takes toward
the investment Of money in this way
ne other point is elemental. simply
human nature Insurance companies
are after all only private corporations,
with will Of their own. They can
extend or withdraw their patronage as
they please. Pass too drastic law
and it is only reasonable to apprehend
the great insurance companies Of ma
tional extent. with the whole United
States to draw upon, might become
peeved and withdraw their business en-
tirely from our own state. People
would be compelled to place their risks
in smaller and local companies in whom
less confidence is and naturally must
be placed. In an attempt to gain too
much, we might lose all.
Insurance companies in North Dako-
ia, at this time, are taking large
amounts of money from the state in
premiums, and returning small
amount in death losses. This is IS.
pecially so because North Dakota is 4 |
new state, insurance new in the >Im, :
and death losses light. They will be- ,
come much heavier in after years. whcr |
the money will be returned to No h |
Dakota; but this is not the only thing !
that insurance companies arr doing for
North Dakota They are loaning large
sums of money through loan comnanic;
and loan agents cn North Dakota real
estate, and loaning it at much 10 wer
rate than it can be procured for from
any other source. We have three or
four agents in this city who are p,ac-'.