362 BOAKD OF AGRICULTURE. 



visability of it. We were appointed a committee to investigate the mat- 

 ter. We went before the judge of the Circuit Court and both made state- 

 ments. We agreed to abide by the decision of the judge. The judge de- 

 cided in my favor and we adopted tliat clause in our constitution. 



Mr. Doup: Suppose 1 own a house worth tifteen hundred dollars and 

 have it insured for one thousand dollars. I am told by the secretaiy that 

 that is all the insurance 1 can carry on that building. When I ask who 

 is to carry the other one-third he says that I must do that. That divides 

 the insurance once, and if the house is partially burned and tlie company 

 does not pay that partial loss in full it is dividing it again. The company 

 divided the responsibility in the first place and made the owner assume 

 one-third of it, without any possibility of his getting anything for that 

 one-third if the house was totally destroyed. The company takes the risk 

 on two-thirds and ought to pay every cent of loss up to tlie amount of 

 that two-thirds. 



Mr. Apple: Mr. Forbes says we buy what we get. That is true. 

 Take the fifteen hundred dollar barn and the owner pays on the one thou- 

 sand dollars insurance he has on it, according to our rules, two dollars a 

 year. If he has laad it insured for ten years he has paid twenty dollars. 

 The man who has the .$150 barn only pays two dollars in ten yera's. When 

 he meets with a total loss we pay him one hundred dollars, and when 

 the other man has a partial loss of $150, we pay him that in full. Would 

 it be fair to pay him only .$100 when he has been paying on $l,t.00 for ten 

 years? 



Mr. Newsom: I should like to ask Mr. Clark why barns and houses 

 are not Insured for the full value the same as personal property? 



Mr. Barrett: On account of the moral hazard. Sometimes in the his- 

 tory of buildings they depreciate very rapidly, and sometimes the changes 

 in the construction of buildings is very great. Sometimes people want 

 new buildings, and if their old buildings were insured for their full value 

 they might get on lire and burn down to make way for the new. 



Mr. Newsom: If moral hazard is going to be distributed through this 

 partial loss, why not insure the building for its full value, and then make 

 any loss that occurs payable to the extent of two-thirds? It seems to me 

 when a question of moral hazard Is considei-ed iu the case of farm build- 

 ings the whole purpose of making the insurance at two-thirds has been 

 served. 



Mr. Johnson: Suppose a building is appraised at three thousand dol- 

 lars and a mutual company will not take more than two thousand dollars 

 on it. If the owner goes to a responsible old line company and they will 

 take one thousand dollars on his property, what amount does the mutual 

 company have to pay if it burns? 



