River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1914-04-23
WISCONSIN STATE INSURANCE
FUND
DESTRUCTION OF THE NORMAL SCHOOL
AT SUPERIOR PRACTICALLY WIPES
1T OUT AGAIN

The destruction of the State
Normal School at Superior, Wis, in
March caused a loss of nearly
$105, 900, insured for go per cent,
or $4,000, in the state insurance
fund. This almost wipes out the
fund, as it's net surplus on April 1
was $780, O3. This should be of in
terest to the voters of Wisconsin,
who are to pass this fall upon a
constitutional amendment author
izing the state to engage in all
forms of insurance. The Wiscon-
sin fire insurance fund has had an
unfortunate experience, having
paid S197, 821 on the state capitol
fire, together with I'VE $4,000 in
other losses since the creation of
the fund.
The Wisconsin fire insurance
fund for a long time re~strictedits
protection to state institutions,
which are presumably of superior
construction and under careful
supervision. In 1912 it offered to
take in county properties and al
though it's premiums on this class
were only 5000, the class of risks
assumed, being of the county jail,
aims house and other Institutional
type, is a much more hazardous
class than state property.
1t is evident that, aside from the
socialistic phase of the matter and
the fact that the state puts itself
in competition with a private bus
mess from which it derives hun
dreds of thousands of dollars a
year in taxes, the people of Wis
consin would have been better off
if they had insured their proper
ties in the regular way, instead
of undertaking the experiment Of
carrying their own risk. The state
capitol fires have been numerous,
as note Iowa, Mississippi, New
York and Missouri, besides mil
lions Of losses on state institu-
tons. If the state of Wisconsin
undertakes to insure the property
of it's citizens against fire, which
is involved in the constitutional
amendment to be voted on this
fall, it would a liability
of nearly a billion dollars. At
any time a conflagration in Mil
Waukee might cause a loss of $780,
000, 900, and there a dozen cities
in the state where cOnflagration
losses of over a million dollars
are possible. There is no assurance
that these conflagrations would
not come very soon after the state
insurance fund was created, and
if SO where would the money with
which to make the payments which
the state of Wisconsin had guar
anteed and on what terms could
money be borrowed under those
conditions?
Wisconsin is no more immune
from conflagrations than was ILL
nois, Maryland or California. Ii
Maryland had had state insurance
such as is proposed in Wisconsin,
it would have needed to raise $40,-
100000 to pay it's loss on the Bal
timore conflagration in 1904. This
at five per cent would be an an
nual charge of $4,000 900 in addi-
ton to other tax burdens OF Mary
land. If California had had state
insurance when San Francisco was
burned in 1906, the state would
have needed to raise over $780,
600, 900, with an annual interest
charge of $40, OOO, 900, if states in
that financial condition could
borrow money at 5 per cent. In
addition to this interest charge,
there would be the need of a sink
ing fund provision to retire the
principal of the bonds, which
would greatly increase the cost,
and all the while the state would
be carrying the risk of another
conflagration in that or some
other large city. The suggestion
is a political, financial and eco
nomic a~bsUrdity, but since it is put
before the people Of Wisconsin by
the legislature, it may be worth
while to point out a few of the
practical difficulties in the way.
mmaNE