1914. 
THE RURAIi NEW-YORKER 
891 
CO-OPERATIVE INSURANCE AND THE 
NEW YORK LAW. 
N Now York State there are a number of cooperative 
fire insurance companies. When properly handled 
these companies have been generally successful. In 
many cases they have saved the insured a groat deal of 
money in the fees for policies. There may be some 
few exceptions to this general rule, but in such cases 
it will be found that outsiders have organized the com¬ 
panies and manipulated them for their own benefit. In 
the true cooperative companies, where farmers and 
home owners have organized and carried on the busi¬ 
ness, they have been economically managed and gen¬ 
erally successful. They must be successful if they 
are managed economically, because in a true coopera¬ 
tive concern the members simply make up their own 
losses, and nothing more except the cost of economical 
adminstration. The companies which are run for capi¬ 
talistic benefit would require a considerable profit in 
addition to taking care of actual losses. During the 
past year, however, there has been some complaint 
from farmers who belong to these cooperative com¬ 
panies. The complaint has been that some of these 
companies were asking for additional premiums, when 
the farmers thought that the premium they paid at. the 
begimvng was to cover practically all their payment. 
For the benefit of farmers who have asked these ques¬ 
tions, and others who are not familiar with the sub¬ 
ject, we give below a statement made by Mr. W. T. 
Emmet. Superintendent of Insurance of the State of 
New York. This covers the ground carefully, and ex¬ 
plains why some of these companies are now forced by 
the new law to change their plans of assessment. They 
have no choice in the matter, as their officers are 
obliged to conform to the laws. 
Statement from the State Superintendent. 
The characteristic feature of these companies is that 
in lieu of the capital and surplus of stock companies, 
cooperative companies possess the right to assess all 
members. The statute classifies these companies into 
two groups, viz.: 1. Assessment corporations. 2. Ad¬ 
vance premium corporations. These groups of com¬ 
panies transact business on different plans, and the 
statute makes special provisions applicable to each 
group. 
Assessment companies charge, at the time of the 
issue of their policies, only trivial fees, which are cal¬ 
culated merely to defray the expenses of inspection 
and placing the business on the companies’ books. 
From time to time, either in accordance with the ex¬ 
press provisions of their by-laws, or to meet accumu¬ 
lated obligations, these companies levy and collect regu¬ 
lar assessments. In this way the policy holders receive 
the benefit of insurance practically at cost, and, al¬ 
though the assessments referred to vary in amount, 
the members become accustomed to the payment of 
such assessments. 
Advance premium companies, on the other hand, col¬ 
lect at the time the policy is issued a premium which 
is calculated to pay all losses and expense of the 
insurance for the full term of the policy. Should a 
company meet with excessive losses, or should the 
premium collected prove to be too small for any other 
reason, the company must assess its policy holders for 
the deficiency unless, of course, it already has a sur¬ 
plus on hand, over and above its unearned premium 
liability, to meet such a contingency. 
Prior to July I, 1010. advance premium cooperative 
companies were not required to maintain, and as a 
matter of fact did not maintain, an unearned premium 
reserve. Chapter 32S of the Laws of 1010, however, 
imposed upon this class of corporations the obligation 
of accumulating and maintaining such a reserve. 
In the case of the Tompkins County Cooperative 
Fire Insurance Company in particular, this require¬ 
ment of the law in respect to the accumulation of the 
reserve was unusually severe. The company had been 
collecting in advance a portion of the premium charged 
for its three-year policies: and at the expiration of the 
first and second years levying an assessment at a rate 
calculated upon the basis of the company’s losses and 
expenses for the preceding year, for the purpose of 
making good the guarantee fund so established. Under 
this plan it was necessary to maintain a large reserve, 
unusual losses being met merely by an increase in the 
rate of assessment. On the passage of the law in 
1010, however, all companies were required to become 
either advance premium or assessment corporations. 
The Tompkins County Company elected to discontinue 
its policy of annual assessments and thereafter trans¬ 
act its business wholly upon the advance premium 
plan. 
It thereupon became necessary for the company to 
accumulate the unearned premium reserve which, as 
pointed out before, was a radical change of policy. In 
11)11 the law was amended so as to allow advance 
premium corporations a period of seven years within 
which to accumulate the reserve. The law was fur¬ 
ther amended in 1912 with reference to the accumula¬ 
tion of such reserve. You will note that advance 
premium companies which did not possess the full un¬ 
earned premium reserve on January 1, 1913, were re¬ 
quired to make good the deficiency therein at the rate 
of 15 per cent, per annum. Upon failure to make the 
percentage of improvement required by law, the statute 
provides that “the Superintendent of Insurance may, 
in the absence of good cause shown why an assessment 
should not be made, direct such corporation to make 
good the entire amount of deficiency by assessment or 
otherwise within 60 days.” 
On December 31, 1912, the Tompkins County Com¬ 
pany had a surplus of $79,422.05 and the unearned 
premium reserve to be accumulated amounted to $149,- 
850.02. Had the company experienced a normal loss 
ratio it might possibly have accumulated the unearned 
premium reserve in the time allowed by law. For 
several years, however, the company’s loss experience 
has been adverse, and by December 31, 1913, its sur¬ 
plus had decreased to $23,621.40, while the unearned 
premium reserve required by law amounted to $131,- 
370.99, thus leaving a deficiency of $107,755.59 to be 
met. 
By reason of the company’s inability under the cir¬ 
cumstances to accumulate funds from current premi¬ 
ums to make good the deficiency, we authorized the 
levy and collection of a single assessment of 35 per 
cent, for this purpose. The only alternative to this 
course would have been several smaller assessments 
at intervals, the expense of collecting w T hieh in small 
amounts from the company's 25,615 policy holders 
would have been much greater as well as more difficult, 
by reason of the insignificance of the amounts due 
upon the smaller policies. 
We might add to the above statement that the pur¬ 
pose of the so-called “unearned premium reserve” is to 
protect the policy holders from the improvident use of 
premiums paid by them in advance. Whether the 
Rugels Plantain Red Clover Yellow Trefoil 
FARM SEED IMPURITIES. 
company is called upon to pay return premiums or 
fire losses, it is an essential of good business policy 
that premiums shall be applied or used only pro rata 
as the same is “earned.” w. t. emmet. 
Superintendent of Insurance. 
New York State News. 
SUFFOLK COUNTY GRANGERS.—At the recent 
meeting of the Suffolk County Pomona Grange it was 
reported that premiums would be offered by the County 
Agricultural Society for Grange exhibits at the fair 
this Fall, three prizes of $100, $75 and $50. The 
movement to erect a Grange building on the fair 
grounds is getting under way and a resolution was 
adopted at the Pomona meeting to the effect that each 
of the 13 subordinate Granges in the county raise at 
least $100 for the purpose. It is expected that $5,000 
will be raised by the Granges and through their in¬ 
fluence. The September meeting of this Pomona will 
be held with the Port Jefferson Grange. 
MEDICAL MEN DISCUSS MILK.—The eighth 
annual meeting of the American Association of Medical 
Milk Commissioners was held in Rochester last week. 
Nearly 100 delegates were present, among them being 
Dr. H. L. Coit, of Newark, N. J., who originated the 
certified milk system 20 years ago. Other noted men 
present were Dr. W. II. Park, director of the State 
Research Laboratories, New York City; Dr. T. C. Mc- 
Cleve, of Berkeley, Cal.; Dr. Henry Koplik, of New 
York City, and Dr. M. P. Ravenal of the University 
of Wisconsin. It is Dr. Ravenal who claims the essen¬ 
tial sameness of bovine and human tuberculosis, and 
who opposed Dr. Koch’s views in a controversy at the 
British Tuberculosis Congress in 1901. 
FRUIT PROSPECTS IN WAYNE COUNTY.—Re¬ 
ports of a careful examination of the fruit orchards 
near Sodus by a party of 40 growers last week indL 
cate that there will be a fine crop of apples, although 
the set has not been quite that indicated by the bloom. 
Kings and Baldwins never looked better, while Green¬ 
ings are not quite so promising. Cherries and plums 
will produce well. Professor Herrick of Cornell has 
been making inspections for insects. Fire blight was 
found very prevalent on one farm, affecting both apple 
and pear orchards. The California apricot scale was 
found in one orchard, this being the second appearance 
that has come to the attention of the University this 
year. Very little is known of this scale, and Winter 
spraying is thought to be the best way to combat the 
pest. 
STATE RECOVERS FOREST LANDS.—The Con¬ 
servation Commission has recovered possession of 2,770 
acres of forest lauds in the Adirondacks as a result of 
decisions handed down last week by Hon. Irving Vann, 
official referee. These lands are located in Warren, 
Hamilton and Essex counties. The plaintiffs are given 
the right to redeem 880 acres upon the payment of 
approximately $5,000. Three other cases involving 
title to 600 acres are yet undecided, and 20 cases are 
yet to be tried. 
FARM BUREAU WORK.—The report of the agent 
of the Allegany County Farm Bureau, submitted to 
the County Grange last week, relates some of the 
activities of the Bureau the past year. Among them 
are the organization of a cow-testing association at 
Fillmore, assisting in the organization of a Holstein 
breeders’ ssociation, placed 75 to 100 carloads of lime 
at a saving to the county of the agent's salary, secured 
better rates on fertilizers, held six farm bureau insti¬ 
tutes, made 481 farm calls, gave 73 lectures, planned 
20 farms and 18 drainage systems, conducted 20 fer¬ 
tilizer experiments, renovated 12 orchards, and con¬ 
ducted several experiments in seed selection, Timothy 
fertilizing, testing value of ground rock prosphate, etc. 
F. C. Smith is manager of the farm bureau. 
GRANGE LECTURERS TO MEET.—State Grange 
Lecturer F. E. Alexander, of Pulaski, has announced 
the dates for the meetings of the county and subordi¬ 
nate lecturers in various sections of the State. The 
dates follow: Aug. 11, Batavia; Aug. 12, Watkins; 
Aug. 13, Hornell; Aug. 14, Fredonia; Aug. 15, Bata¬ 
via; Aug. 18, Cortland; Aug. 19, Oneonta; Aug. 20, 
Newburg; Aug. 21. Hudson; Aug. 22, Troy; Aug. 25, 
Watertown; Aug. 26, Malone; Aug. 27, Whallonsburg; 
Aug. 28, Fonda; Aug. 29, Syracuse. j. w. D. 
Government Crop Report. 
In the Southern Winter wheat sections the harvest is 
over. It is beginning under favorable weather condi¬ 
tions in the central part of the belt. The yield in Texas 
and Alabama was less than anticipated, but in other 
sections the favorable prospects were realized. Weather 
has been favorable for rapid growth in the Spring wheat 
regions. 
Warm weather and showers in the corn belt have 
greatly improved the prospect, though there are still 
spots where the plant is suffering from drought. 
Hay, oats and pasture are in good condition in the 
Western and Northern districts, but short in the Middle 
Mississippi and Ohio valleys and southward. 
Weather in the cotton sections is the most favorable 
of the season. There have been good rains in both the 
Eastern and Western portions. Boll weevil very trouble¬ 
some in Louisiana, Mississippi and Alabama. 
In the Atlantic States there is severe drought, espe¬ 
cially in Virginia, retarding corn and tobacco setting. 
Foreign Crops. 
Weather in northern portions of the Continent has 
been unseasonably cool, and this with drought in some 
sections has retarded the wheat crop. Spain, Italy and 
Portugal promise large grain yields. In France the area 
in wheat (16.045,000 acres) is less than the two preced¬ 
ing years, and present outlook is not favorable. Wheat 
harvest is finished in British India and Persia, yields 
being 313,000.000 and 14,000.000 bushels, respectively. 
European Russia is expected to have 297,041,000 bush¬ 
els of wheat and 932.534,000 of rye. The total area 
under grain in Canada is thus reported : Wheat. 11.203,- 
800 acres, or 188.800 acres more than in 1913; oats, 
10,811.000 acres, compared with 10,434.000 acres last 
year; barley. 1,604.000 acres, or 9,000 acres less than a 
year ago; and rye, 111,070 acres, against 119,300 acres 
in 1913. The condition of Spring wheat June 1 was 93, 
Winter wheat, 79. 
Canadian Fruit Report. 
The apple outlook is favorable, except in Nova Scotia, 
the Annapolis Valley being especially thin. In parts of 
Ontario tent caterpillar has reduced the crop. The 
Okanagan and Kootenay valleys of British Columbia 
will have a medium yield. 
Pears are scarce in'Quebec and Eastern Ontario. 
Nova Scotia will have about 50 per cent, and British 
Columbia very large. 
Peaches are nearly a failure in Ontario, except the 
Essex_ Peninsula and a scattering in Lambton County. 
The Kootenay Valley will have no peaches. 
Heavy plantings of tomatoes were made in Western 
Ontario to offset the peach shortage. The probability 
is that the supply will be excessive. 
Nova Scotia, the Niagara district, and southern and 
western counties of Ontario have large crops of cherries. 
Eastern Ontario is short. 
The great grape section, the Niagara district, will 
have a large yield. In others parts of Ontario the 
scattering vineyards were considerably hurt by frost. 
Strawberries in the Dominion are below the average, 
owing to drought and Spring frosts. 
Virginia Fruit Report. 
Secretary Walter Whately states that Virginia ex¬ 
pects to have a large apple crop, with the exception of 
Albemarle Pippins. The following percentages, based on 
full crops, are given for the various sections of the 
State: 
Piedmont—Potomac to James River: Pippin, 35 
per cent; Wiuesap. 65: York, 52; Ben Davis, 70; Stay- 
man. 55; M. B. Twig, 50; other Winter apples, 60; Fall 
varieties* 55: peaches, 65. James River southward: 
Pippin, 40 ;_ Winesap. 77; York, 52; Ben Davis, 55; 
Stayman, 65 ; M. B. Twig, 60; other Winter apples, 65 ; 
Fall, 55. Peaches, 60. 
The Valley : To south boundary Rockingham county: 
Pippin 30; Wiuesap. 75; York, 80; Ben Davis, 82; 
Stayman, 78; 31. B. Twig, 70; other Winter, 83; Fall. 
82. Peaches, 70. South Rockingham county to south¬ 
ern boundary of Roanoke: Pippin, 33; Winesap, 75; 
York, 80; Ben Davis, SO; Stayman, 77; M. B. Twig. 
73; other Winter, 77 ; Fall. 77. Peaches. 75. 
Southwest Virginia: South boundary of Roanoke 
county to North Carolina line: Pippin. 25; Winesap, 
80; York, 75; Ben Davis, 77; Stayman, 65; M. B. 
Twig, 77; other Winter, 80; Fall, 80. Peaches. 80. 
Middle Virginia: Pippin not grown; Wiuesap. 47; 
York. 25; Ben Davis, 35; Stayman, 25; M. B. Twig, 5; 
other Winter, 60; Fall, 35. Peaches, 50. 
