The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1920-02-17
$7,O00,O00 TOO
BIG FOR PROFIT!
ON HAILSCHEME
Assistant Attorney General
Packard Says Townley Press
Exaggerates
PLAN NOT A BIG SUCCESS
Official Declares North Dakota
Compares Poorly With
South Dakota

Assistant Attorney General F. T..
Packard in Il statement issued today
asserts that. the declaration of the
Townley press that state hail insur-
ance saved North Dakota $7,OOO0OO
in 1910 is on a par with previously
published assurances that the Bank
of North Dakota has made $4,000
for the people Of North Dakota dur
ing it's first five months existence.
According to the state insurance
department" says Mr. Packard, "the
total risks written by private com
panies in 1913 were $36.097, ,911.G4 the
gross premiums paid were $685.
G97.17; the losses paid were $2.G94,-
412.2O, and the net profit to the in
surance companies was $2,2S4.S5. The
average premium was 10 cents on a
$1O-per-acre risk. The maximum risk
under the state law was 81 per acre.
On this basis the Old-line premium
was :52R cents an acre.
:. QUOTES INSURANCE REPORT
."Still quoting the insurance depart
ment.' continued Mr.. Packard. ''the
hree-cents-an-acre tax levied by the
present law on 2S0O6,990 acres pro
duced Il revenue of $S4O,2O9.7O. The
number of acres presumed to have
been insured total - Il million, but
owing to errors in listing the indemni-
ty tax was levied against l.oiilN-e11.-
100000 acres. which, at % cents an
acre, yielded $2,75O,OOO, making the
total gross revenue under the act $3,-
59O,2O97O The total risks assumed
"Applying last years average old
line premium Of 81 II cents an acre
to the 11.NU.OOO acres insured in 1?1"
under the state law. we get $5,77j,OOO
as the gross premiums. TO arrive at
the cost under the state department
we must deduct from this cost under
old-line insurance the cost under state
insurance. namely. $3.50, ,2M7O. This
shows a saving Of $2.1S47G9.O3.
THE FLAT HAIL TAX
1T must not be forgotten, however,
that the three-cents-an-acre tax was
levied on more than 2S0OO.OOO acres;
while there were only 100000 acres
insured leaving more than 100000
acres which paid tax of three cents
an acre without deriving any benefit
10 get at the actual saving to the
people Of the state. this tax Of $50
2O97O must be deducted from the say
ing arrived at. further reducing it to
$1.G74, 1898.
"Instead of saving the farmer Of
the state $7,0OO,0OO. the state hail i'll
surance plan saved them $1.G75,OOO.
In other words. the Townley press
exaggerated a trifle better than four
times, which is fair batting average.
There is another phase of state
hail insurance under the present law
The insured who suffers loss must
wait until a tax is levied and paid.
the greater part Of year after he
actually suffers loss fro his money
or he may discount his warrant at 4
local bank or cash it at par at the
state bank. In any event. interest
must be paid on the whole loss for a
period Of many months.
"Complaint is very general that the
adjutantS were to nServativc-that
the actual loss was not always paid.
This would appear to be indicated by
the fact that while there was con-
siderable more than twice as many
acres insured in 1919 as in 1918. that
loss paid was only % percent more.
no GREAT IMPROVEMENT
"Taking these two considerations in
to account. it is exceedingly doubtful
if the present act is any great i'm
provement over private insurance.
That the law could he made TO be OF
considerable benefit to the people of
the state is indicated by the expert
ence Of South Dakota. In North Da-
kOta the cost per acre runs approNl-
mately 50 cents for "a S7-an-acre in
surance. South Dakota furnishes a
$1O-an-acre protection for 30 cents al:
acre. Had North Dakota furnished!
$1O-an-acre protection. the cost would
have been within 6.S cents of the old-
line average premium in 1913. A real
state hail insurance act might have
saved the people of the state several
million dollars, while it is very ques,
tiOnable if the present act has saved
them anything.
Had the act been compulsory
about ten cents an acre addition tC
the three-cent tar would have paid the
losses for 1919 and would not have
been a hardship for those who elected
to try state insurance. The law should
either work by zones after the South
Dakota idea. or should be compulsory
after Canadian IDEA. The hybriC
North Dakota law works hardshi,
upon the insured in those areas Where
there is seldom nail