4 DEPARTMENT BULLETIN 912. 
companies in 1915. In the three years following 1916. however, the 
premiums of the mutuals again increased each year, reaching $4,775,- 
000 in 1919. 
During these same years the joint-stock insurance companies 
showed continued and rapid progress. The number of such com- 
panies writing hail insurance continued to increase, and their total 
premiums in 1916, as well as in 1917, exceeded $8,000,000. In 1918 
the hail premiums of joint-stock companies on their business in the 
United States exceeded $12,850,000, and for 1919 the corresponding 
figure was approximately $19,460,000. 
In the early days of hail insurance but little information existed 
as to the nature of the hail hazard and its relative severity in differ- 
ent localities. Many of the early hail mutuals appear to have been 
patterned on the local farmers' mutual fire insurance companies, with- 
out an adequate recognition, on the part of the organizers and man- 
agers, of the radical difference between the fire hazard in relation to 
segregated farm buildings and the hail hazard in relation to fields of 
growing grain. With a reasonable number of risks in a given locality, 
the law of average will apply to the losses of farm buildings by fire 
in a way that it can not possibly apply to the losses in the case of 
hail insurance on growing crops. Unlike fire, a hailstorm seldom, 
if ever, strikes one farm only but cuts a swath through a limited ter- 
ritory, resembling in its effects a conflagration in the case of urban 
fire risks. The fact that mutual hail insurance in the West North- 
Central States continued to increase in volume as well as in the 
number of companies writing it may be credited, therefore, to the 
need for such insurance on the part of the farmers rather than to any 
general success on the part of the mutuals offering this protection. 
The causes of the frequent failure among the early hail mutuals 
can not be charged entirely, however, to lack of knowledge of the 
hail hazard. In many instances the failures were due to reckless 
or unscrupulous promotions, the organizers taking advantage of the 
general inadequacy of insurance laws, which were especially lax in 
regard to mutual companies. In cases of this kind the permanency 
or soundness of the company was frequently a minor consideration 
with the managers, whose direct object was prompt and liberal in- 
comes from salaries and commissions. 
Mutual promotions of the speculative type have tended to dis- 
credit all hail mutuals and have constituted a serious handicap to the 
growth and development of companies organized by men of ability 
aiming at real service to their constituents. To a somewhat less 
extent the same has been true of hail mutuals which were promoted 
by men who. while honest and sincere, were lacking in knowledge of 
the hail hazard or in ability as managers. 
