HAIL INSURANCE ON FARM CROPS. 29 
mercial crop predominates is further heightened by the fact that this 
commercial crop is very generally insured by the farmer without 
including his other field acreage, thus causing hail risks of the in- 
surance companies to be concentrated in a single crop to a degree 
even greater than are the farmer's crop prospects taken as a whole. 
In States in which considerable diversification of crops occurs there 
will exist at no given time this high degree of susceptibility to damage 
from hail. In such States farmers more generally insure more than 
one crop. The critical period of one or more of these crops is likely to 
be past before that of other crops is reached. The total hail loss in 
such States, as well as the part of such losses covered by insurance 
will, therefore, tend to vary less from year to year than is the case in 
States where there is little diversification. However, since the 
amount of hail that falls and the angle at which it falls, depending 
upon the intensity of the wind during the hail storm, are uncertain 
and variable, as well as the time at which hail occurs, it follows that 
considerable variations in hail damage from year to year will be 
found even in States having a wide diversification of crops. 
It should be apparent, therefore, that no insurance company can 
with safety assume a large volume of hail risks in a limited territory 
unless it has available assets in considerable amount. While this is 
especially true with reference to the tier of States composed of Texas, 
Oklahoma, Kansas, Nebraska, and the two Dakotas, as well as for 
the States immediately to the west of the tier, it is essentially true for 
all localities where hail constitutes a hazard severe enough to merit 
special attention. A new company, obliged to rely for the meeting 
of its obligations largely or entirely upon the premiums collected 
during the year, should see that the risks assumed are scattered over 
as wide a territory as circumstances permit. A limit must be placed 
on the acreage that may be accepted for insurance in any one square 
mile of area, in any one township, and, finally, in any one county. 
Even with restrictions of this kind carefully provided for and ap- 
plied, the small, joint-stock company without accumulated reserves 
takes greater or less chances of direct failure, while the mutual hail 
insurance company, similarly situated, takes chances of having to 
collect unduly large premiums if operating on the unlimited liability 
plan, and of having to prorate its losses if operating on the fixed 
premium plan. 
The mutual as well as the newly. organized or small joint-stock 
company doing a hail insurance business must use every reasonable 
opportunity to build up a surplus or reserve fund. In the case of 
mutual companies, the mutualism must, in the case of hail insur- 
ance at least, be interpreted to embrace not only the members of the 
company during a given year, but must be held to embrace, to a con- 
siderable extent, the membership included for a series of years. 
Those who join the company in a year when the hail hazard happens 
to be unusually light, for example, must be willing to be assessed 
