INSURING STANDING FORESTS 



MUTUAL insurance of standing timber has re- 

 cently been introduced in the United States with 

 striking success. As with many other forms of 

 forest development New Hampshire is the first state in 

 which the practice has been applied. The results there 

 have been such as to attract widespread attention among 

 the owners of timberlands in other parts of the country 

 and to warrant the belief that forest insurance on a 

 mutual basis will soon become as popular here as abroad. 

 The Timberlands Mutual Fire Insurance Company 

 was formed by leading lumbermen and men experienced 

 in the handling of fire protection in the woodlands. Its 

 operations are based on careful consideration of all avail- 

 able data as to the average loss over protected areas. 

 This data came from widely scattered sources and rep- 

 resents the experience of successful insurance operations 

 in foreign lands by both stock and mutual companies 

 and by the stock companies of America. With this in- 

 formation as a foundation the company has been enabled 

 to arrive at conclusions that eliminate much of the ex- 

 perimental work in a new enterprise of this nature and 

 to give service at a minimum of cost and risk. 



Besides giving policyholders their insurance at cost 

 the mutual company is regarded as affording a valuable 

 stimulus to planting and long time management of wood- 

 lands, for which adequate and continuous protection will 

 be demanded. Of similar importance is that the insur- 

 ance makes timberlands more satisfactory security for 

 loans. Through these factors it is believed the new form 

 of insurance will help establish a broader and more defi- 

 nite market for cut-over lands and plantations and thus 

 create new values and a new source of wealth. 



The New Hampshire company is now accepting ap- 

 plications and issuing policies covering loss or damage 

 by fire on merchantable standing timber, young standing 

 timber and plantations. Insurance is written on no tracts 

 which are not adequately protected from fire by forest 

 protective associations, the state or the owner. As an- 

 other measure to minimize the hazard the company will 

 not accept tracts which contain or adjoin recent slashings 

 or which are exposed to undue danger from fire. The 

 amount of insurance on any tract is governed by location 

 and value and no line is given on any ri.sk in excess of 

 that warranted by the assets of the company. With this 

 limitation timber may be insured for part or full value, 

 as desired by the owner. Merchantable timber is insured 

 on the basis of its stumpage value per thousand feet or 

 per cord, while young growth and plantations are cov- 

 ered on an agreed value per acre. 



As a mutual company the organization has for its aim 

 the granting of insurance at actual cost, eliminating the 

 agents' commissions and other items that must be added 

 to the charges of companies operating for profit. For the 

 current year the company has established a base rate of 

 two per cent, premium deposit, with the announcement 

 that this is several times the average annual percentage 



of loss experienced over a number of years in standing 

 timber under organized protection. Each premium paid 

 is treated as a cash deposit. Such portion of this deposit 

 as may not be absorbed by losses, expenses and necessary 

 reserves will be returned to policyholders in the form of 

 dividends. In this way it is claimed that the company 

 places at the service of timber owners facilities for in- 

 suring standing timber at the lowest possible cost, hith- 

 erto unobtainable in this country. 



Among the arguments set forth in behalf of this form 

 of insurance are the following: 



It guarantees owners the money value of their young 

 growing timber which otherwise, if fire-killed before 

 reaching merchantable size, becomes a total loss. 



It makes standing timber a more acceptable security 

 for money loans and thereby increases the owner's bor- 

 rowing capacity on timber pledged as collateral. 



It is a guarantee for money spent in making planta- 

 tions and gives protection which warrants planting on a 

 more extensive scale than has heretofore been practiced. 



It is a stimulus to continued and adequate forest pro- 

 vection, as reduction of hazard will result in reduction of 

 insurance cost. 



The majority of the organizers and directors of the 

 company are owners and operators of standing timber, 

 who have been active for years in promoting forest pro- 

 tection. They believe that mutual insurance is now both 

 safe and economical and that indemnity for fire losses 

 by means of insurance is of importance next to fire pro- 

 tection itself. In the formation of the company there 

 have been no exj>enses for promotion and organization. 

 The only charges incurred were those for the charter 

 and license fees. 



Evidence of the high character of the organization 

 is afforded by its personnel. As its president the com- 

 I)any has W. R. Brown, president of the Berlin Mills 

 Company, of Berlin, N. H., a director of the American 

 Forestry Association and president of the New Hampshire 

 Timberland Owners' Association, who conceived the 

 idea and is chiefly responsible for its successful devel- 

 opment. Other ofikers ajre: Vice president, E. E, 

 Amey, of the American Realty Company, Portland, Me. : 

 treasurer and manager, S. L. de Carteret, Portsmouth, 

 N. H. ; secretary, T. E. Sears, of Gilmour, Rothery & 

 Company, Portsmouth, N. H. In addition to President 

 Brown and Vice President Amey the directors are : 



Martin A. Brown, Woodstock Lumber Company, Bos- 

 ton, Mass. ; George B. Leighton, N. H. Forestry Commis- 

 sion, Dublin, N. H. ; George Hewitt Myers, Washing- 

 ton, D. C. ; H. G. Philbrook, Connecticut Valley Lilm- 

 Ijcr Company, Boston, Mass. ; E. Bertram Pike, Pike 

 Manufacturing Company, Pike, N. H. ; Weld A. Rollins, 

 Lawyer, Boston, Mass. ; L. S. Tainter, Publishers' Paper 

 Conii)any. Boston. Mass. ; C. C. Wilson, Odell Manufac- 

 turing Company, Groveton, N. H. ; F. J. Suloway, Law- 

 yer, Concord, N. H. 



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