The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1914-06-23

who appeared last week before the
Legislative Committee which met in |
Raleigh in investigation Of fire insur-
ance conditions and rates cave his
views as follows:
Gentlemen Of the Committee:
If In the outset, / may be ~pardoned
a personal reference, the impression
derived from Is years experience as
manager of n group Of North Carolina
Insurance has settled mo
q convict or that the cost of life II
surance is greater Ran it ought t. be,
ana riat efficiency i'll method AM COR
duct and policy on, the part of all the
f~actors that enter Into the determine
ton of this cost, bearing in mind that
the State is just as important a fac
tor in the determination of this cost
as the insurance is, can un-
q~uestionably bring about the desired
reduction. While a solution of this
fire insurance problem is difficult, it
is not Impossible if viewed in the light
of open-minded fairness.
81 confess that any opinion l may
express will not be worth anything if
my point of view is that the insurance
companies are doing all they can and
all that can reasonable be expected of
them in the matter. Neither would it
be worth anything if looking at it
from the standpoint of the State, l
should hold hat the State is doing
all that she can do and all that can
reasonably he expected of her
i'm the matter. l hope to make it
clear that neither are the insurance
companies doing their part, nor is the
State doing it's part; that both the one
and the other have something to con-
tribute to a satisfactory solution; and
that neither one can make the prOpo-
~ of Otnn NC n lvn MOO n I 90
unless the other measures up to, its
duty and shoulders its share of the
responsibility. l hope to be able to
show that between the State and the
insurance companies in this matter OF
rates there is a mutality Of effort and
understanding. You will see what !
mean wAen l suggest that the mobile
element. the untixed charge in the
fire insurance rate, is that most un-
certain of all things, the fire loss, and
that this major part Of the fire insur-
ance. cost depends in large measure
upon the restraining and preventive
influence of the laws of the State or
the one hand and this same restrain
ing and preventive influence of the
method which the insurance cOmpa,
MES use in the onduc Of their bust.
ness on the other. Both the State anC
the insurance companies nave takeI
the wrong measure of that thriftless
wasteful wealth destroying habi
which we call the fire waste. The
State has regarded it too much as
Joke on the insurance companies and
as a matter Of concern for them rathe.
than for the public, while the in
uranc companies may have in turf
regarded it as no affair Of theirs s.
long as the rates paid the bill. Tha
attitude of the State on the one han'
and of the insurance companies OF
the other is the one thing that is re
-: =
and hey can never be any owe un
til that attitude on the part Of bot
has been reversed. Let the State trea
the fire waste as it does any Othe
public evil or nuisance. so that n
man can have a fire without bein
called to task about 1t and Wlthou
fnding - distinctly inconvenient, an
let the fire insurance companies as
sumo the same unSelfish altruiStic at
titude Of responsibility toward the fir
waste which life insurance companie
have assumed toward the publi
health, and the cost OF fire inSuranc
can be reduced to a figure Whic
would be no burden to anybody.
Rates Based on the Cost.
The same principle applies in, de
. termining the price of fire lnSuranC
as in determining the price OF an
other commodity. 1t is merely a ma
ter of the cost. In fire insurance tn
Cost 10 Al
and that is all there is to lit. II
expense for companies licensed to q
business in North Carolina average
about 40 per cent of the premium
39.4 per cent. to be exact. and II
cludes commissions too agents avcras
ing about 20 per cent taxes. llcens'
and fees averaging about 4 per cen
supervision and inspection averaglr
more tina 6 per cent, leaving 10 ~
cent for supplies, postage. office re-
and equipment, clerk hire, SaiaTl
and other home office and admin
trative expenses. There is no su'
%stantial reduction that can be ma
in these items that go to make up Il
expense. You cannot convince the !
cal agent that he can afford to Wol
for any less commission than he is I
ceiying. He will have something
say about the high cost of living
YOU propose anything of that sort. \
body has succeeded so far in co
yincing the State that she can
without her 4 per cent for taxes.
ccnses and fees. and that this is mef
" an indirect tax which she leyies u