6 BULLETIN" 840, U. S. DEPARTMENT OF AGRICULTURE. 



these pairs of spaces are in turn separated by a more pronounced 

 line. The sample pages here given (Form 1, left-hand page and 

 right-hand page) provide room for recording only 10 policies. In 

 practice the pages should be made long enough for the record of 20 

 policies. For convenience in tracing the record of a given policy 

 across the double page, the horizontal lines separating each group 

 of five double spaces should be ruled extra heavy or in a color distinct 

 from the other horizontal lines. 



It will be noticed that the left-hand page of Form 1 is, in general, 

 devoted to the description of the policy, while the right-hand page 

 provides space for the recording of fees and assessments. The head- 

 ings of the various columns are believed to be self-explanatory. 

 More than two-thirds of the farmers' mutuals write policies regu- 

 larly for a term of five years, and partly for this reason no special 

 column has been provided for the date of expiration. In cases 

 where the company writes policies for varying periods of time, and 

 the expiration for this reason is not readily ascertainable from the 

 date of the policy, the upper half of column 6 may be used for the 

 date of the policy and the lower half for the time of expiration. 



The left-hand page of Form 1, it will be seen, includes spaces for 

 recording property insured by classes, as well as for the total amount 

 of the policy. A strict adherence to bookkeeping principles would 

 require that extra columns for increases and cancellations be provided 

 in connection with each of the five class columns in Form 1, as well 

 as in connection with the column for the total amount of insurance.. 

 Since to do so would make the pages unduly wide, however, and since 

 the changes in a given class column will be relatively less frequent 

 than in the column for total insurance, it was deemed advisable to 

 handle changes in the class columns by the simple plan of crossing 

 out the superseded figures and entering the corrected item above, as 

 shown in two of the sample entries. The columns for insurance by 

 class in the policy register do not need to be refooted to show net 

 amounts after increases or cancellations have been recorded, since 

 these items can be obtained for the period in question from the special 

 book for increases and cancellations. 



While only a relatively small number of the farmers' mutuals at 

 present classify their risks, it is becoming recognized to an increasing 

 extent that justice as well as expediency demands such classification. 1 



1 Under the all-one-rate plan the owners of the better class of risks pay part of the 

 insurance cost of the owners of the more hazardous class of risks. Larger companies 

 which do classify can underbid a local mutual which does not classify, on the most 

 desirable risks in the territory of the latter, even though the average insurance cost 

 be considerably higher in the larger company. Lastly a proper classification constitutes 

 one of the most effective means that a company can employ for the improvement of the 

 risks in its territory, and hence for the further reduction of its insurance cost as well 

 as for the conservation of the property of its members. 



A suggested plan of classification of farm property may be found in Department Bul- 

 letin 530, entitled, " The Organization aDd Management of a Farmers' Mutual Fire In- 



