PRESENT TENDENCY 211 



the years 1904-1908 would seem to show the wisdom of a different 

 course. In 1904 an "expense fund" was provided for. This 

 reserve for such it was grew to $46,106.46 in 1906, after all 

 losses of that year had been paid. The 1906 losses were $38, 121 .24, 

 while the losses the next year were $312,085.72, or over eight 

 times as much. Consequently the reserve was wiped out, an 8 

 per cent assessment used up, and still an unpaid balance of losses 

 of over $30,000 was left over to the next year. The by-laws at 

 present do not permit a carryover of unpaid losses. A larger 

 assessment in good years and a lower assessment in bad years 

 would equalize the burden and promote the welfare of the Asso- 

 ciation. If the total volume of business could be greatly increased, 

 thus reducing the share of operating expenses and if a level 

 premium or at least some nearer approach to a level premium of, 

 say, five per cent could be charged it is likely that a big reserve 

 could be built up against the bad years. Future crises could then 

 be met. As it is, a mutual company is always walking on the 

 brink of dissolution. 



Present Tendency. The state of mind of the farmer to-day is 

 turning him, instinctively, to State administered, compulsory hail 

 insurance. He knows that his own mutual company is paying 

 to its " middlemen" from 10 to 70 per cent of the total outlay for 

 hail insurance, but that without these middlemen he would either 

 have no insurance at all or much costlier insurance. Hence he is 

 wondering why the State cannot undertake this service. The 

 farmer's position has peculiar strength and force here, since the 

 State now has in working order complete machinery for levying 

 and collecting taxes and assessments of various kinds. With a 

 negligible increase in expense, it could collect a compulsory hail 

 insurance tax. 



In actual practice, as this chapter shows, neither State hail 

 insurance nor mutual hail insurance is at this stage of affairs a 

 complete success. But experience with State hail insurance makes 

 the farmer want more of it, not less of it. 



Those desiring to trace in detail the vicissitudes of a mutual 

 hail insurance company through a period of a quarter of a 

 century can do so by studying the following table. The great 

 fluctuation in losses from year to year is a striking feature of 

 the table. 



