342 JOURNAL OP FORKSTRY 



(2) The expense of preliminary estimate and valuation of small lots 

 of land is prohibitive in view of the small premium received. With 

 the co-insurance clause inserted it is safe to take the members' own 

 returns as to amounts and value as correct, and when a number of ad- 

 jacent risks have been secured, they can be passed upon by the mana- 

 ger in one trip rather than many. 



(3) A very large capital reserve is required by law to enable a com- 

 pany to obtain a charter to write freely a considerable line in all States 

 and secure the advantage of covering a wide area and the average risk. 

 The National Lumber Manufacturers' Association might possibly do 

 this if general co-operation by large timberland owners could be ob- 

 tained. Old line commercial insurance companies, however, who have 

 a well-established business and large reserves are in a particularly 

 desirable position to take on this new line of insurance if they distribute 

 their risks wisely, secure sufficient volume, and charge appropriate vary- 

 ing rates based on previously ascertained tables. If it were possible to 

 secure unlimited backing at the start by the creation of a Federal Tim- 

 berland Insurance Department at Washington as an adjunct of the 

 Forest Service, with the Government's assurance behind it, it is my 

 opinion that an annual premium of one-half of 1 per cent on policies 

 written over all States and on selected risks would more than pay all 

 losses, and if the management was carried on as an integral part of the 

 Forest Service, in connection with its other duties, and little charge 

 made therefor, a sufficiently low annual rate could be offered timber- 

 land owners to attract the large as well as the small, and secure the 

 average risk. The effect of insurance on the practice of forestry and 

 the conservative management of timberlands cannot be overestimated. 



(4) A standard expenditure for fire protection must be insisted upon 

 absolutely wherever fire insurance is carried. In New England 1 

 cent per acre per year seems to be satisfactory; in the Province of 

 Quebec, where vast areas are uninhabited from one-quarter to one-half 

 cent proves sufficient ; in the Middle Western States 2 or 3 cents 

 per acre is the practice; and in the far West, where values per acre are 

 high, as much as 5 or 6 cents per acre is often required. New England 

 offers the most security on account of the character of the climate, 

 species and soil, and the farm and other natural barriers that cut the 

 timberland up into blocks and make the danger of a widespread con- 

 flagration small. In proportion to values the New England States and 

 associations assess themselves the most for fire protection. 



