The Birmingham age-herald., 1915-07-16
All Depends on Management

| 10 the EdltOr or The ASe-tteralu. 1 In your issue today Mir w. R. Young 1 of West Blocton says he has been
 reading with interest the letters l have l given The Age-Herald from time to
 time, of which I am glad, because, If my friends will read what I have to say on the insurance question, they will find the letters. if not interesting, certainly Illuminating. have no de-
 sire to hide my light under a bushel;
 on the contrary. I want its rays to
 reach as far as possible.
 l Mir. Young does not altogether agree
 with me in some of my views. although l I know him personally to be most
 agreeable gentleman. He used to be
 a good insurance man. I do not know whether he Is still in the business. | but at one time he was agent for ore of the great companies and made them
 a good agent, too.
 l Differences in opinion make up a large part of life and find that many
 admirable people do not always see | things from the same viewpoint that
 do. think discussion of any public question tends to enlightenment, for in | the multitude of counselors there Is l wisdom.
 I therefore welcome 1t and remem-
 bering that Tong as the lamp holds
 out to burn the vilest sinner may re-
 turn" I hope to keep mine trimmed
 and burning, trusting that after
 awhile some for whom I have almost
 losthope will "come through"
 The letter which Mir. Young refers | to suggested that certain mutual fire insurance companies had made re-
 markable success. One l mentioned had
 accumulated assets of million dol I lars, after having returned for about | 67 years annual dividends to its pol
 icyholders. the last one being for SO
 per cent of the premiums paid An
 other one had had a remarkably low | loss ratio, it being in 1913 about 29 per cent less than half of the average loss ratio of the tariff companies, who | claim that because of their heavy
 losses in Alabama they are justified | in increasing the tax on the public to
 an enormous extent, in some cases don- ble what they were a few years ago. 1 I have denied the justice of the claim 1 and pointed out that some mutual com | panies have made a better showing as 1 to loss ratio. l have claimed that the | tariff companies have been able to In | crease the rates because they were | able to combine and control and shut 1 out competition and thus maintain the l advance made l contend that one way | to provide competition Is to induce the | organization of mutual companies in l Alabama and suggested that the pres | ent legislature pass laws encouraging l the formation of new companies and l repeal a number of laws which have I n a | the tariff companies and against the
 interests of the people
 As against this argument MT. Young 1 sets up the alleged fact that many mu-
 tual companies fail. Granted. So do many
 stock companies fail and because both l fail from mismanagement or from any other cause. is no argument against the | principle of mutuality. If a man can't | trust his neighbor in Alabama Is he like | ly to find his faith in a foreigner any
 more justified. One of the principal trou- bles with the south is that for years and years 1t has been sending immense sums | outside of It's borders for what ought to
 money kept there.
 1 MT Young mentions the Farmers Mu- | tual as a company which has numerous
 claims unpaid and has been in financial difficulties for the last year. Well, so | has about everything else been in finan- | any friends interested in claims against 1 the company named, will undertake to collect them for him, and will make my 1 compensation depend on the success of
 my efforts. He mentioned another mutual
 company, as ''busted.' This company | paid all its debts, and was not "busted" | in the sense that it failed. It simply
 amalgamated with larger company and
 ceased doing business. Tn other words, | retired as did over 100 stock companies
 within the past five years They rein
 sured in other companies, amalgamatsd. | liuuidated, or what not. any howa they ceased to exist as they had. mutual
 compsny may be mismanaged but 1t is no more likely to lose out for that req
 son than is a stock company.
 In some states they the mutual com panies) have been phenomenally success | ful. Let me give few instances or what
 mutuaIity has done in life insurance. The Mutual Life and the New York Life 1n-
 surance companies, with assets each 1 around $500 0O0,0 600. are strictly mutual ; companies The Equitable Life was or- ganized just after some interested parties got a law passed requiring that after a certain date no company could be organ
 ized with lesg than $100.oo0 capital, Just
 as interested parties got the same law | passed in Alabama. but the Equitable | limited its stock to the amount provided | by law and limited the amount of divi-
 dends which could be paid thereon to per cent and declared that all profits above that amount should be divided
 among the policyholders. Many millions ! have been returned to policyholders un-
 der this plan and the Equitable has grown
 from a little company whose force in | 1859 consisted of one man, to a giant in- | stituton with assets of over $535,000 900.
 The Prudential Insurance company has recently been mutualized. and many Of | the most successful institutions in the United States are operated on mutual | basis. We have as smart men in Ala | bama as there are elsewhere and if they 1 are given chance they can also build up great institutions which will serve the | public honestly and keep the money al | home and believe the legislature IS going to make it possible for them to do | so and at the same time lift the burden l of taxation we are now suffering under at the hands of the insurance trust. Yours truly, JAMES H. hAHD.
 Birmingham. July IA. 1915
 An Anti-Suffragist's View
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