HAIL INSURANCE ON FARM CROPS. 5 



As time went on the nature and severity of the hail hazard in the 

 different States became better known. Insurance laws, as well as 

 the administration of these laws, became in general more effective in 

 safeguarding the interests of the policyholders, and farmers to an in- 

 creasing extent became aware that it is necessary to know something 

 about the men in charge of the mutual organizations as well as to 

 see that the plan on which insurance is offered is a reasonably work- 

 able one. Because of these changes in conditions ill-considered and 

 speculative promotions of hail mutuals appear in general to have 

 passed their climax in each State a few years after the organization 

 of the first hail mutuals in the State. Such climax in promotions 

 was reached in the State of North Dakota in the middle nineties, in 

 Minnesota and Nebraska during the last few years of the past cen- 

 tury, and in Iowa during the first years of the present century. In 

 Oklahoma the promotion period centered about the year 1903, and 

 in Texas it occurred nearly 10 years later. The State of Kansas 

 presents an exception to the general rule, in that the period of most 

 rapid promotion of short-lived companies came more than two 

 decades after the first hail mutuals were organized. The earliest 

 hail mutual in Kansas, as already stated, began business in 1889, 

 but the climax in the promotion of hail mutuals in that State was not 

 reached until the five-year period following 1910. 



One of the most spectacular mutual hail insurance promotions that 

 has occurred in any State took place in Missouri in 1919, and the 

 organization in question is now in the hands of receivers. This com- 

 pany did not limit itself to hail coverage, nowever, but included de- 

 structive storms of whatever nature, and partly for this reason the 

 risks assumed by it have not been included in the data contained in 

 this bulletin. 



The total number of mutual hail insurance companies of which 

 record has been found, either from insurance reports or from other 

 sources, is 121. Of these 121 hail mutuals, only 41 companies were 

 in existence at the date of the most recent insurance reports. The 

 other 80 hail mutuals have ceased operations, either voluntarily for 

 lack of patronage or under pressure applied by State insurance de- 

 partments. This relatively high mortality among the mutual hail 

 insurance companies as a class has frequently been interpreted as 

 proof of unsoundness and instability in every mutual hail insurance 

 company, without regard to its individual record or merit. Such a 

 conclusion is no more justified than would be a conclusion that all 

 joint-stock fire insurance companies are unsound because of the large 

 percentage of such companies that, for one reason or another, have 

 gone out of business. Xo reliable figures are at hand for the total 

 number of joint-stock fire insurance companies that have been organ- 

 ized in the United States. According; to some of the best-known 



