46 CANADA - INSURANCE AND THRIFT 



b) Provision for Making Insurance Absolute. 



i) Suggested Plans. — The committee pointed out in their report that 

 insurance could be made absolute by three methods : by the possession of 

 a surplus of other assets equal to the insurance at risk ; by a mutual company 

 in which each of the insured would agree to pay the levies in full in any 3^ear ; 

 or by an unknown compulsory tax upon the land. 



The first of these expedients was out of the question because the 1916 

 losses would leave over neither surplus nor current revenue, and the as- 

 sets pro\4ding for the future were Umited. The second method was only 

 appHcable to a scheme under which individuals voluntarily applied for 

 insurance. 



The third method if appHed in its simplest form would involve the 

 levying on all assessable lands, at the end of an^^ year in wliich revenue 

 had been inadequate to paying indemnities at the agreed rate, of a tax suf- 

 ficient to cover the deficit. Such additional assessment would in 1916 

 have been 16 cents, an acre if this method of indemnifying at the rate of $5 

 an acre had been adopted. The full cost of insurance in that year would 

 therefore have been 20 cents an acre. 



The committee did not deem it wise or just to burden the land with 

 liability to such a tax. Even so important a matter as insurance against 

 hail did not, in their opinion, justify this placing on the land, which already 

 contributed largely to public objects, of a bvurden which could not be estimat- 

 ed beforehand and might be very onerous. 



Under the existing system holders of land in municipalities under the 

 Act are in the position of members of a limited mutual company in which 

 the majority, who are grain growers, compel not only themselves but 

 also the minority, who are not grain growers, to pay a fixed charge upon 

 their lands in order to protect only the grain growers. Proposals were 

 therefore made which sought to limit liabilit}^ to an additional tax to 

 grain growers. 



The details of one of these plans may be given. It aimed at ensur- 

 ing that those actually enjoying protection should have full mutual respon- 

 sibility for the insurance ; and that a sufficient accumulated surplus should 

 be procured to give ample protection in case of a year or years of extraor- 

 dinary loss. It proposed therefore that neither the 4 cent per acre assess- 

 ment rate nor the $ 5 maximum indemnity should be altered ; but that an 

 extra and variable rate beginning at 12 cents an acre should be levied on all 

 crops at risk, which rate should be lowered only when a surplus equal to 

 10 per cent, of the risk carried had been accumulated. Any farmer was to 

 be allowed to withdraw his crop acreage from this assessment b}' foregoing 

 aU claim upon the protection of the Commission. No municipality was 

 to be permitted to withdraw from the scheme while it was indebted to the 

 Commission, or in any circumstances without two 5'ears' notice. The Com- 

 mission was to have power to levy on the insured crop acreage an emergency 

 rate, not exceeding 20 cents an acre in any one year, with which to meet 



