PRESENT PROBLEMS IN INSURANCE 251 



may profit. The fire insurance exchanges have aroused some oppo- 

 sition, and very recently action has been brought against one of 

 them on the ground that it is a conspiracy in restraint of trade. I 

 regard the exchanges as one of the most valuable and indispensable 

 developments connected with fire insurance. They are compilers 

 of information. They work for uniformity in the inspection of 

 risks, in rating, in building regulations, and in every other depart- 

 ment of the work. The exchanges might well be intrusted with the 

 establishment of net rates, leaving it to the individual companies 

 to compete in economy of management and in the care with which 

 their risks are selected and inspected. The establishment of rates 

 by an exchange is likely to arouse hostility on the ground that the 

 exchange is a combination formed for the purpose of exacting exces- 

 sive rates from the public. This is an old cry. That the danger 

 exists is obvious. That it can be prevented is not open to reason- 

 able doubt. The exchanges merit full legal recognition with safe- 

 guards against the abuse of the powers which they may exercise. 

 An atomistic fire insurance world can bring advantages to no one, 

 and it is likely seriously to prevent progress. The abolition of the 

 exchanges would remove one of the most potent factors making 

 for scientific methods, and it is to be hoped that no such drastic 

 measures will be resorted to anywhere in the United States. I 

 cannot leave the subject of fire insurance without protesting once 

 more against valued policy legislation, because it is an encourage- 

 ment to crime and subversive of private and public morality. It 

 is no more profitable to enter into hysterics over " insurance and 

 crime " than over " theology and crime," but the valued policy 

 law is in itself objectionable from every point of view. 



In conclusion, a few words must be devoted to those branches of 

 insurance which are still in an inchoate state and which were re- 

 ferred to in an earlier paragraph of this paper, in connection with 

 the suggestion to make insurance an all-inclusive institution con- 

 cerning the contingencies covered. The urgent need of dealing 

 fully with the problem of accident insurance has already been 

 pointed out. Insurance against losses from flood, tornadoes, hail, 

 and other destructive agencies is in the interest of society as a whole. 

 In view of the fact that these causes of loss do not appear with known 

 regularity nor within well-defined territorial limits, the question 

 arises whether this foim of insurance may properly be left to the 

 government. Studies have been made of the destructiveness of 

 floods and tornadoes which might be used as the basis for the imposi- 

 tion of a tornado or flood tax. The levees on the Mississippi were 

 built partly through* federal aid, partly through levee district taxes, 

 and partly through state taxes. The same principle might be ap- 

 plied to the collection of flood, tornado, and hail taxes. These 



