The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1911-02-08
Protest on Compulsory
Investment Legislation

converted into cash even for the pay
ment of claims arising under local
policies, or for loans thereon,
If at any time a company should
have even more onerous conditions i'm
posed upon them, and be obliged to
cease doing business in the particu-
lar state, q considerable share of their
assets would be tied up for an indefi-
mite period
The companies doing business in
Texas, in 1907, Notwithstanding the
great expense they had incurred ir
building up their plants, securing
agents, etc, felt compelled to lose all
this, and their Texas business as well,
and almost all these companies retired
from the state. The penalty, or cost,
as you please, for remaining and COM
plying with the Robertson law was too
great.
AS 1t generally the case in the en-
actment of unwise laws, the Robertson
law was so hastily drawn, so hurriedly
considered and so rushed to its passage
that in operation many defects deveI-
oped.
The legislature of 1909 FASTENED to
repeal the law and to enact a modi-
fed version of it, which, at the same
session, it was found necessary to
amend.
At this time the pretense that the
law was for the better security Of
policyholders" was abandoned as hav-
ing served its turn and the real reason
for the law, to force the life COM
panies to invest in Texas securities,
or, as the last amendment, approved
April 2, 1909, puts 1.-THE passage of
this act will tend to invite a heavy
inflow Of cheap money to this state
was boldly put forth and everything
else was made secondary.
Texas securities" included, among
others, Office buildings to be erected
or purchased in cities of over 1000
inhabitants. Investments of this kind
are now prohibited by the law OF New
York and many other states, or con-
fined to one office building for COM
pany's own use.
Laws compelling investments are the
most Objectionable and the least salts
factory method of obtaining forced
loans, but probably the last means by
which they can be obtained. Capital
is always timid and will shun the most
alluring proposition If there is no re-
treat, should retreat be desired.
There is another side to the Texas
situation which illumines the subject
we are considering, and that is the in
convenience and loss to the Texas pol
icyholders and to the state.
The Robertson law prohibited a COM
pany, not complying with its terms to
do any business of any kind in the
state. The Texas policyholders, there
fore, were compelled to transact their
business by mail, or to allow their poll
ctes to lapse because OF non payment
of premiums. This also applied to any
application for change of beneficiary
and generally for any change in the
kind Of policies or benefits Hereunder,
and to furnish proofs of loss; such
matters having been Heretofore gen
orally arranged for directly through
the local representative of the COM
pany.
The loss to the state Of Texas gen.
orally is very considerable. In 1906,
the year before the Robertson law was
enacted, premiums amounting to over
$9,050,000 were collected in the state,
and the state received as occupation
taxes 2 per cent, or over s1s1 900. as
revenue
The tax on premiums collected in
1907, most of which was lost to the
state because Of the retirement of the
companies, due to the Robertson law.
probably amounted to more than this
amount.
For the year 1908. the state lost taxes
on over 100000. TO this must be
added the tax on whatever amount the
companies that had withdrawn from
the state, would have received In new
premiums and on policies that had
been allowed to lapse because the com
panies were no longer permitted to give
attention thereto.
There are no figures obtainable, at
this time, for the year 1903. 1t is a
safe estimate, however, that the state
has lost in taxes an average amount of
over $4,000 year for each OF the
years 1908, 1908 and 1910, or a total
Of $4,000. all OF which, together with
the future Losses from the same source
must be made good from other sources.
probably BY increased levies on the
property of the citizens.
incidentally, small part Of this loss