INSURANCE. 



379 



The commissioners, in respect to the cost of 

 insurance, remark : " It would be interesting 

 to infer the average cost to policy-holders and 

 profit to the companies of each branch of in- 

 surance, but the returns lack the completeness 

 and distinctness necessary to give a proper 

 basis of facts. In the marine business, we have 

 no means of knowing the whole or the average 

 amount of risk borne or business done during 

 the year, and in a year of disturbance like the 

 past, the amount of risk outstanding at the close 

 is hardly an indication of it. As to average 

 profits, a question which really pertains only 

 to Stock Companies, nothing can be determined, 

 because the companies are chiefly mixed, in- 

 suring both fire and marine risks, while the ex- 

 penses of each are not distinguished. In regard 

 to the average cost to the policy-holder of the 

 dollar of indemnity for loss by fire, it is pos- 

 sible more nearly to approach it, in regard to 

 the two classes of Stock and Mutual Fire Com- 

 panies. In the Stock Companies, the cash re- 

 ceived for fire risks during the year, and in the 

 Mutual Fire Companies, the cash received less 

 the cash dividend returned during the year, 

 represent very nearly the whole premium for 

 the risks borne during the year on which the 

 losses paid have occurred. From this we can 

 easily infer how much the policy-holder has on 

 the average had to pay in each year, in each 

 class of companies, for every dollar of indemnity 

 he has received.' 1 



ported in this year compared with last is as 

 follows : 



The whole number of home companies re- 



The laws of New York, wher.e the largest 

 amount of insurance has been effected, indicate 

 the changes which have taken place in the course 

 of business. Up to the revision of the State Con- 

 stitution in 1846, it was usual to grant special 

 charters for the incorporation of companies, 

 and fire, marine, and life powers were often 

 granted to one and the same company. The 

 growing jealousy of the people in respect to all 

 corporations, led to the enactment of general 

 laws, aud in 1849 a general insurance law was 

 passed by which any number of persons exceed- 

 ing fifteen might organize into a company for 

 fire and marine insurance, but it was expressly 

 ordered that no company insuring lives should 

 take any other kind of risks. In 1853 a new 

 law was passed, enacting that no fire company 

 should take any but fire and internal navigation 

 risks. 



In 1836, when the great fire of 1835 had 

 swept down all the companies of that day, 11 

 companies on the mntnal plan were organized ; 

 these still exist. In 1837. 4 more were started, 

 and 4 others were added up to 1849, when 

 under the general law 42 were started, of which 

 9 only remain. Of late years, the increase of 

 companies has been very rapid, and the profits 

 large. In the last 8 years the 21 companies 

 organized prior to 1838 have declared an 

 average of 142 per cent., or 18 per cent, per 

 annum average. The dividends of other com- 

 panies are not so large, but give very good in- 

 vestments. In 1861 the New York State com- 

 panies were as follows : 



The Mutual Fire Companies, now in New 

 York State, compare as follows: 



1853. 

 1859. 

 1860. 

 1861. 



No. 



62 

 23 

 27 

 25 



AueU. 



$11,621,914 

 4,793,506 

 4.128,101 

 4,560,159 



This indicates the decline of the mutual 

 principle in the State as applied to Fire Insur- 

 ance. These are mostly, however, in the in- 

 terior of the State,, while the Stock Companies 

 are more in the city of New York. Of the ex- 

 isting Stock Companies 21 were organized prior 

 to 1838 ; under the act of 1849, 38 ; and under 

 the act of 1853. 37 were organized, makina the 

 total of 96. Of these 11, with a capital of $1,- 



900,000, were organized in 1859. In addition 

 to the Xew York companies doing business in 

 New York, there are English companies, and 

 also large institutions chartered in other 

 States. Formerly, or up to 1836, foreigners 

 could do business in New York only by paying 

 a tax of 10 per cent. This was reduced to 2 

 per cent., and this tax gave a revenue of $3,18$ 

 or $813 per annum more than was derived from 

 the 10 per cent. tax. The two great fires of 

 1835 and 1845 demonstrated the importance of 

 having as much capital applied to the insurance 

 of city property as possible. Instead of keep- 

 ing foreign capital out by a high tax, it was 

 manifestly advantageous that a portion of the 

 city losses should be borne by that capital. 



