INSURANCE---FIRE AND MARINE.

marine companies in Paris obtained permis. sion from the government to make insurances against fire. For a long time the practice was by no means general. Owing to the solid structure of their buildings and the extraordinary caution on the part of the people for the prevention of fires, few sought protection by means of insurance. It has been confidently asserted by persons well acquainted with both the cities of London and Amsterdam, that after making all fair allowances there is upon an average more property destroyed by fire in the former in one

surance has, however, now become very general, and some of the continental companies are the largest and strongest in the world.

THE history of Fire Insurance dates back only to the year following the Great Fire in London in 1666, if indeed it can be said to have had any clearly defined existence before the year 1696, when the first organized association was formed, based upon the simple principle of contribution in the shape of annual premiums proportionate to the amount of property insured, to a common fund, out of which the losses of its various members were to be made good. This association was very appropriately styled the "Hand in Hand, or Amicable Contribution Society," and was strictly mutual in charac-year than in the latter in twenty. Fire Inter. A number of attempts had been made for some system of Fire Insurance as early as 1669, all of which proved abortive, as did the attempt of the City of London in 1681 to settle lands and ground rents to the value of £100,000, together with the sums to be received for premiums, as a fund for the insurance of houses. About the year 1670 a company was established in Edinburgh for friendly insurance against fire, consisting of a number of private contributors, who agreed to insure each other. This insurance, however, was not personal, like modern fire insurance, but the interest, and stock, and benefit were inseparably annexed to the houses insured as long as the contribution was continued. Little progress was made under any of these forms before the commencement of the eighteenth century, when the Sun Fire Office in London was established in 1710, from which time Fire Insurance may be said to date its progress under the form of both mutual and stock companies. The limited experience obtained up to that time, had given some general notions as to hazards of different classes of property, and by enabling a proper rate to be fixed proportionate to the hazard, had so far reduced the rates charged as to render insurance easily obtainable and popular. From this time companies multiplied in England, and previous to the war of our revolution had numerous agencies in the then Colonies. In other countries of Europe the practice of insuring against fire was not introduced until a much later period, about 1754, when the

The first Fire Insurance Company organized in the United States was the "Philadelphia Contributionship for insuring houses from loss by fire," in 1752. This was purely a mutual company, requiring a deposit from the insured, the interest of which would meet the losses of each year and yield something over for a dividend at the termination of the risk, which was for seven years. The plan was borrowed from the first English company of similar name, and the company numbered among its directors Dr. Franklin and other men eminent in colonial and revolutionary times. For many years after the peace of 1783, an insurance company, on the principle of the ancient London "Hand in Hand," existed in New York, and continued to do a moderate business until incorporated companies with capital stock became common and superceded the mutual plan, which was found to be too slow and cumbrous for the growing business of that city. The first stock company formed in the United States was the Insurance Company of North America in Philadelphia in 1794. Others followed in Providence, Boston, and New York from that time until a few years after the beginning of the present century, when Fire Insurance in this country may be said to have been established on essentially the same general principles as at present conducted. The first quarter of this cen

tury witnessed a moderate growth; the second quarter made some progress, notwithstanding the two great fires, and ended with a moderate increase in capital and business. The extensive and enormous development of fire insurance in this country has been the work of the last twenty-five years, during which time a radical change has been wrought in the mode of doing the business by stock companies instead of mutual, and by the present wide spread and almost universal system of agencies.

in the City of New York may be taken as a fair criterion by which to judge of its progress in other prominent cities of our coun

capital of New York and Brooklyn amounted to about $6,000,000; to which should be added a considerable number of mutual companies and agencies of Hartford and Boston companies, which were then established for the first time to any considerable extent in that city. The great fire of July, 1845, swept most of these mutuals and again several of the stock companies into insolvency, and left a large number with capitals seriously impaired. Of the companies rendered insolvent by this last calamity, none In 1833, previous to which we have no ever revived. From this time there was reliable statistical information, there were in little increase in companies or capital until the City of New York some eighteen Fire the passage of the general insurance law by Insurance Companies, with an aggregate the State of New York in 1849, under which, capital of a little over $6,000,000, one of and the law of 1853, which took its place, a which had a capital of $1,000,000, and three very large number of the companies were others had $500,000 each, while the remain- organized in the City of New York, thus ing capitals ranged from $200,000 to $350,- bringing the aggregate fire insurance capital 000. It would be interesting to know the of the state at the end of 1870 up to over exact amount of premiums annually received twenty-nine millions of dollars, again, howby these companies at that date, but having ever, reduced at the end of 1871 to a trifle no reliable statistics to refer to, an approxi- over twenty-two millions by the great fire mate estimate can only be formed, based at Chicago. The progress of fire insurance upon the recollection of parties who were then connected with certain of those institutions. From the last data of this kind now available it is ascertained quite satisfactorily try. Philadelphia and Boston have not exthat the whole amount of premiums received by all the companies in that and the two following years respectively, was something less than $1,000,000. At that time there were no agencies of companies of other states, or foreign companies, in the State of New York, the English companies having been excluded by a law passed March, 1814. From 1833 to December, 1835, seven new companies were organized, with an aggregate capital of about $1,700.000, making the entire fire insurance capital at the time of the great fire in December of the latter year a little less than $8,000,000. The great fire of 1835, which destroyed about six hundred buildings, mostly stores and warehouses, and property to the value of between $15,000,000 and $20,000,000, caused the insolvency of all but seven of the companies then in existence in that city, thus reducing the actual capital for fire insurance to about $1,000,000. The insolvent companies paid variously from 40 to 90 per cent. on the claims for losses under their policies. During the next ten years many of the companies were revived under favorable legislation and new companies organized, so that the fire insurance

perienced such sudden fluctuations in capital as New York, having escaped fires of magnitude like those of 1835 and 1845. The older companies in both cities have been noted for solidity and conservatism. To Hartford belongs the credit of originating and giving vitality to the agency system in fire insurance. For a time, indeed, that city had almost a monopoly of the agency fire business, and is now second to none in the country in the character, position, and finan⚫ cial strength of its companies. The business has proved a source of wealth to that city, and it now has more insurance capital in proportion to its size than any other city in the country. Within the past fifteen years a great number of companies have been started in the prominent cities of the west, with more or less success. Such as have been organized with actual capital and prudently managed have generally succeeded, with the exception of the Chicago companies, which were engulfed in the terrible disaster of October, 1871. The past thirty years have witnessed the rise and extinction of hundreds of mutual and stock companies of purely speculative character, which never

deserved public confidence, and soon met the fate which always attends corporations organized with fraudulent purpose or managed by incompetent men. To one of these causes may be attributed the failure of nearly all the companies which have gone down during that time, except such as have been overwhelmed in one or the other of the three great fires already referred to. Many strong and well managed companies have been swept away before the great cyclones of fire which have more than once marked the history of the past forty years, and in yielding to inevitable and unavoidable calamity have secured the commendation rather than censure of the public; while such corporations, whether mutual or stock, as have been conceived in fraud and designed to prey upon the credulity or ignorance of the assured deserve only contempt and the severest punishment of the managers through whom such vast injury has been done to the insuring public.

be noticed in the fact that the entire premium receipts of all the mutual fire insurance companies in that state do not exceed one-third of those of the Etna of Hartford, or onehalf those of the Home of New York, while the premiums of nearly a dozen stock companies separately equal the entire aggregate. In Vermont the system has been tried for more than forty years by the Vermont Mutual with better results, owing to the excellent management of the company, and the fact that its business has ever been confined exclusively to risks in that state. In other states of the Union mutual companies have shared the same fate as those of New York. and it would seem that the system, as such, is totally inadequate to the growing demands of trade and the increasing value of property to be insured.

It is a noticeable fact that in 1837 there were 48 joint stock companies in Massachusetts, with a combined capital of $9,415,000, while in 1868 there were only 29 companies, with a capital stock of $6,934,800. Comparing, however, the business of the companies, it will be found that the 48 companies in 1837 were insuring fire and marine risks to the amount of only $140,000,000, while the 29 companies in 1868 had $330,

sumed in that state by companies from other states for the 16 years previous to 1869, was even more marked than that of the state companies, having risen from $6,373,000 in 1852 to $250,000,000 in 1868. The development of the joint stock plan of fire in

Of this class of companies, those of a mutual character have been most noticeable for the injury which has been inflicted on the insured and the disrepute into which the business of fire insurance was brought in the ten years following 1850. Under the general insurance law of 1849 a large num-000.000 at risk. The increase of risks asber of mutual companies were organized in the State of New York, and in 1853 numbered 62, with nominal assets in excess of eleven and a half millions of dollars. In 1860 the number had fallen to 27, with assets less than four and a quarter millions, and in 1870 only eight companies were insurance in the State of New York has been existence, with assets of about two and a quarter millions. In the State of New York the system of mutual insurance has proved a signal failure. In Massachusetts, at the close of 1849, sixty mutual companies were in existence, and at the close of 1868 the number had been reduced to 54, with gross assets of $3,990,367.66, and outstanding risks to the amount of $307,063,988.05. Most of these are located in the interior of the state, and are so small as to make the policies of comparatively little value, since, to pay losses, assessments are required, and these, if of any considerable magnitude, are fatal to the standing of the companies. The mutual system in Massachusetts is adapted only to the immediate locality of the companies, and seems to be gradually following the fate of the system in New York, as will

equally remarkable. In 1844 there were 20 companies, having an aggregate capital of $5,710,000, with amount insured $119,571,000, while in 1870 the number had increased to 105, with an aggregate capital of

29,761,232, and amount insured $2,813,983,769. The number of companies in the state at the end of 1871 was reduced by the great fire at Chicago to 84, with capital of $22,307,010, and amount of risks covered $2,397,339.63. It may be proper to note in this connection the increase of capital in companies from other states doing business in the State of New York from $12,351,315 with $567,887,673 at risk in 1859, to $22,971,101 for capital in 1870, with risks $1,695,633,560.

The following table, compiled from official reports of companies doing business in