The Washington times., 1914-12-24

and more. like all other businesses,
OF a public character, coming 10
recognize that the best policy Is 10
deal openly and fairly with the pun
lie. Schedule rate making Is an at
tempt 70 adjust insurance rates 10
the risks and hazards OF dinerehl
buildings and different occupancy.
These rates are made up In
scientific manner and a merchant
or property-owner may md out eN-
actly how or why his rate is what
II is.
He may find out what betterments
or improvements will reduce his
chances OF fire and also reduce his
rate. The result of this careful IN
spection OF each individual risk un-
questionably tends to reduce nre
waste and loss.
Insurance rates cannot borsRs;sent-
IL fall below the aIucnae ~ pre-
miums needed to pay tho lseess ana
to pay the eXpeI.Ios Of conducting
the business. The expenses OF con-
Quoting fire insurance business Is
high, II not eXtravagant but there
has never been suggested. as yet.
a law which proposes to regulate or
fix the rate OF commission or sal
aries or any other expenses incident
to the fire insurance business.
Many States have laws providing
that a few companies or man. COIL
panies can form underwriters hu-
reaus. but that the rates made end
promulgated by these bureaus shall
be under the supervision OF the state
departments. and open at all times
TO inspection, and I'm some states
these rates are subject to revision or
reduction where the superintendent,
on complaints, finds the rate unjust.
unfair or discriminating.
In discussing the matter Of rate regu-
lation Mr.. Nesbit asserted there are
- hall hat fFR
and unrestricted competition between
companies will adjust rates. but that
the number OF people who heii"v" this is
small In comparison with those Tho
believed IL twenty years ago. lic said:
There is a wide difference Of "pin-
ion between insurance mon and be
tween students of insurance as IN
this whole question OF rate TerllI-
ton.
In an opinion referred 10 by the
United States Supreme Court, We
find the following language:
we may venture to observ" ihat
the price of insurance Is not liked
over the counters OF the companies
by what Adam Smith calls tho mig
Cling of the market, but formed In
fhc councils OF the underwriters. pro
ntIlgated in schedules OF practically
controlling constance which the APP
pIicant for insurance Is powcrless TO
oppose, and which, therefore. has led
70 the assertion that the business Of
insurance is OF monopolistic Charac-
fer. and that 1T Is illusory TO speak
of a liberty of contract
TT is in the alternative presented
of accepting the rates Of the Compa-
MES or refraining from insurance.
business necessity impelling II not
compelling II, that We may discover
the inducement Of the Kansas stat
ute, and the problem presented Is
whether the legislature could regard
Il of as much moment to the public
that they who seek insurance should
no more be constrained by arbitrary
terms than they who seek trans
portation by railroads, steam or
street. or by coaches whose itinerary
may be only a few city blocks. or
who seek the use OF grain elevators,
or be secured in a nights accommo-
dalton at a wayslde inn. or In the
weight of a scent loaf OF bread. We
do not say this TO belittle such
rights or to exaggerate the effects
of Insurance. but to exhibit tho prin-
ciple which exists IN all and brings
all under the same governmental
power.
This decision will historically mark
the period dividing private rate-mak-
ing from public rate-makins. Public
rate-making, however. is not ncccs-
sarily State rate-making.