848 KESOTJECES OF CALIFORNIA. 



the long run. The occasional losses are more than covered by 

 tl^e regular collection of the premiums. The amount of tjje 

 premium is determmed by the risk, and the risk is known from 

 long observation to within a very small percentage. 



We have only two small assurance companies in California, 

 and nearly all our assurance business is done by companies of 

 the Eastern states and Europe, represented by agents here. 

 These agents do a very large and profitable business, a busi- 

 ness w^hicli ought to be done by companies organized in our 

 own state. Not less than $600,000 are annually sent fi*om 

 this state for assurance premiums, and the total losses do not 

 exceed $200,000, leaving a clear profit of $400,000, or sixty- 

 six per cent, to the assurers. These figures are not extrava- 

 gant estimates, made without a knowledge of the subject ; if 

 there be any error, they represent the profits less than they 

 really are. Nearly all the policies, for w^hich these $600,000 

 of premium are obtained, are issued on property in San Fran- 

 cisco, and the losses by fire in 1860 were $162,000, an unusually 

 large amount, the average during the previous five years hav- 

 ing been $105,000, or thereabouts. 



The average premium paid is about one and one-half per 

 cent., the lowest being three-quarters of one per cent., and the 

 highest three, or even four per cent., whereas one-quarter ol 

 one per cent, on an average would pay the losses. 



