The herald and news. [volume] (Newberry S.C.) 1903-1937, 1916-04-04

which the insurance interests attached
to the action Of the South Carolina
legislature in its bearing upon the ma
ton at large, bears out the Atlanta
dispatch above quoted.
In al address to the people of South
Carolina, which l issued and which
was published few days ago, I dis
cussed this general phase of the sit
uation. and in this communication
will confine mysel to details.
State Warehouse Insurance.
Oar insurance on State cotton is in
tact, but I do not know how long it
may remain so, and I feel that it is
necessary to take some action to pro-
tect, in any emergency which may
arise, the receipts issued i'll the name
of the State.
l make the following suggestion in
this regard, and il: it meets with your
approval | will call those interested in
State warehouses to meet iii the vari-
Gus counties and select representa-
tiYes, authorized to act for them. to
meet in Columbia to perfect the plan
Immediately:
Let each warehouse pay in advance
for one year the insurance premium
on the cotton on hand, at the present
rate, and subscribe as stock from $50
to $500 each, according to the business
of the warehouse. The premiums and
stock subscriptions woull go into the
treasury of this State cotton insurance
company to provide against losses The
premiums would be used Just as the
premiums are now used, the earned
premiums going to the surplus fund
Of the company and the unearned
premiums being returned tc the house
at the close o. the seasons business.
The stock subscriptions would, of
course, DE held, along with the earned
premiums. In the event Of fire, if
the capital and earned premiums OF
the company should not be sufficient
to pay the loss-which is a remote
contingency - each house would he
assessed it's proportionate share, based
on the amount of cotton on hand at
the time of the fire, TO meet the def
cheney. ou of the unearned premium to
its credit in the hands OF the CON-
pany.
Distribute the cotton so as not to
have over a certain number Of bales
in any one location, and reiusure on
the larger risks, if possible.
In any other insurance arrangement
except in the State system the ware
house would have to pay TIE yearly
premium in advance, anyway. The
lower rate which the State system has
offered and afforded would more than
Offset the stock to be subscribed.
The subscriptions to the capital
stock would not be limited to $500,
but i some house or some individual
desired to take more, the way would
be open, and the capital stock would
produce dividends and surplus in pro-
portion to the profits.
By dividing the cotton in only COM
paratively few Of the warehouses at
present in the system. this plan could
be put into operation Immediately.
A rigid inspection and vigilance on
the part Of the various houses, who
would be the stockholders, would
keep the losses down to the minimum,
and the earned premiums would go
back to the stockholders in dividends
and in the value OF the stock which
they hold, constantly increased by
reason of the surplus accumulated.
This would give every warehouse in
the State system insurance at actual
cost, with the risks distributed with
even more safeguards than could be
thrown around them by the most con-
servatiye old line companies
The expense of conducting the COM
pany would be very small
Had such a company been organ
lied when the State system first be-
gan operation it would now have
surplus of more than $4,000. There
has been only one small loss since
the system was inaugurated, amount
ing to less than s12 900, and more than
$50 900 has been paid out III insurance
premiums. even at the extremely low
rate which the system has been able
to secure.
Mutual Insurance Companies