The Nonpartisan Leader Newspaper, December 22, 1919, Page 5

the roads in 1917, as shown in the waée board re-. port: ; R._S. Lovétt, chairman executive committee, Union P ac BT e e e e P e S A R e $104,104.16 L. F. Loree, president, Delaware & Hudson........ ~50,800.00 L. F. Loree, chairman executive committee, Kansas 4 City Southern’ .. il eiialedstiii oo s amamaiss e 30,825.00 . M. Dickinson, receiver Chicago, Rock Island & . PACIHAC o Tl Tl e lartoacd oat S s e e 120,732.00 M. L. Bell, general counsel, Chicago, Rock Island > B PReiflo i a S e SN e 59,486.00 H. E. B)rnm, p1e51dent Chicago, Milwaukee & St. 60,000.00 ¢ 22,500.00 Marvin Hughitt Sr., chairman pf board, Chicago & Northwestern .i..cccoiveececitocsesosssassene 60,460.00 Marvin Hughitt J vice president, Chicago & . . NOTthWESEEIT o L s eiinaniaie s 35t s i sinis, 0.0 3 loass aen ~ 25,050.00 Hale Holden, Burlington & = g QUINEY.. s00a s i denim sitiosins dlaasms it e e 65,000.00 Louis W. Hill, chairman, Great Northern ........ 50,000.00 Julius Kruttschnitt, chairman of executive committee *~ of board of directors, Southern Pacific...... i... 88,860.00 J. M. Hannaford, president, Northern Pacific...... 50,000.00 F. E. House, president, Duluth & Iron Range...... 84,645.00 George T. Slade, first vice president, Northern Paci 85,120.00 William Sprouls, president, Southern Pacific........ 62,036.00 L. E. Johnson, president, Missouri Pacific......... 60,090.00 E. Pennington, president, Minneapolis, St. Paul & Sanlt Stes Marie i it e st e asien se s ves s 52,723.00 William F. Herrin, vice president and chief counsel, . Southern " PACIIC. it e siosioeeisissassionesiosesss 38,170.00 H, U. Mudge, president, Denver & Rio Grande...... 43,232.00 Henry McAllister Jr., general counsel, Denver & Rio U Grande. Js. susiit e sssdieits siviesiedioms serebieisisieis 55,000.00 E. T. Jeffery, chairman of board, Denver &- Rio (0 L B e L B O s SR 20,166.00 Chadbourne & Shores, counsel, Denver & Rio Gyande 63,000.00 Carter, Ledyard & Milburn, general counsel, Denver & RIO GrRNEE: e e St e st s fie & 55,000.00 A J. Earling, president, Chicago, Milwaukee & St. Paul 75,319.00 H. B. Earling, vice premdent, St. 20,000.00 D. L. Bush St. Paul . 20,010.00 B. F. Bush; president, Missouri Pacific ............. 44,170.00 A. H. Smith, president, New York Central........ 78,360.00 This situation, in which a few hundred of railroad executives and railroad lawyers are assured of very high salaries so long as the railroads are privately operated, and in which many of them must accept great reductions in their pay if they remain with the railroads under public operation, has added tremendously to the agitation among these men for a return of the railroads to private operation. They argue that a good man is worth $60,000 or $100,000, or even more, if he saves that much to the railroad. Advocates of public ownership reply that $20,000 should be enough for a railroad official. The people, said Representative Sims, were pay- ing all these bills in a higher cost of living. When the roads go back to private control this burden will be heavier than ever before. He proposed that it be sharply cut down. The house failed to support his amendment. Real ‘Hail Insurance at Minimum Cost - Protection From Loss Costs North Dakota Farmers Only 28 Cents an Acre in Disastrous Year—Why Old Laws Failed ~|ORTH DAKOTA, in 1911, was the | first state to adopt what was called state hail insurance. There was a tremendous de- mand from the farmers for re- lief from the exactions of.the . private hail insurance com- panies. The legislature conse- quently ‘enacted a law—care- lessly and unscientifically drawn. The law was virtually a failure. It came as near, as any law could, toward k111mg the demand of the farmers for state insurance. But it did not quite accom- plish this result. In 1915 along came the Nonpartisan league The League, advocating that the state should go more into the field of business to he\lp its citizens, had to face the charge that the 1911 hail insurance law was a failure. - - . “That doesn’t prove that state insurance is wrong,” said the League. “It proves that we have the wrong kind of a law. Let’s get the right kind of a law.” Such a law was passed in the spring of 1919, when the League, for the first time, came into full control of the legislature. It is possible now to estimate accurately the results of the new law and to compare them with the old law and with the re- sults under private insurance. First, look for a moment at operations of the private hail insurance companies. Their rates have averaged, ordinarily in recent years, about 10 per ‘cent. For 70 cents an acre a farmer could get $7 worth of insurance, for 80 cents an acre $8 worth, -$1 an acre would buy $10 worth of protection and so on. Commissions, advertising and other ex- penses of the private companies ate up approxi- mately one-third of their collections. Generally the companies were able“to “pay off,” but sometimes they went broke and the farmers had to pocket their loss.’ PROVISIONS OF OLD - 4 HAIL INSURANCE LAW The hail insurance’ law of 1911 prov1ded a pre- mium of 20 cents an acre and insurance of $8 an acre, provided premiums were sufficient to pay this . amount. County assessors were required to solicit business, collecting premiums in cash and remitting to the state.® This was a faulty procedure from the start. Many of the farmers did not have the ready cash in the spring and could get credit with the private companies, which had their agencies with local banks.” Many of the assessors and their deputies were made hgents of the private insurance companies and instead of soliciting state insurance “knocked” it with might and main, at the same time soliciting business for the private companies. The first year of state insurance, 1911, there were 1,011 policies taken out, premium receipts aggre- gating $26,119. Hail losses of farmers insured .under the state were more than $40,000 so instead of paying the $8 per acre the state fund was able only topay on a 70 per cent basis, or $5.60 per acre. This was an additianal talking point for the private companies, who pomted out that besides having to pay cash in ad- vance for their state insurance, the farmers had no means of lmowmg how much they would get back in’ case of a total loss. It was unbusinesslike procedure. In spite of this the farmers rallied to the support -of state hail insurance in 1912, and 2,505 policies were taken out, with receipts ’ amounting to $66,340. But 1912 was a bad hail year, losses aggregating more than $105,- 000 under the state insurance, and the state fund was able to pay out only on a 55 per cent basis, or $4.40 per acre. This proved the death blow to this plan of state insurance. Although the next leglslature raised the assessment from 20 to 30 cents per acre, in an effort to get sufficient funds so that state insurance would pay off in full,. there was such a sharp reduction in patronage that it was not possible to sign up enough business to distribute the risks fairly and operate on business principles. The re- sult was that state“hail insur- ance under the old plan in no ear was able to pay out 100 per cent on its policies. The farmers of North Da- kota, however, were undaunt- ed in their search for real state insurance. In 1918 they adopt- ed a constitutional amendment allowing assessments’ to be made compulsory and the League legislature that con- vened in 1919 had something to work upon. The chief faults of the old law were the requirement of payntent of cash premiums in advance and the uncertainty as to whether, the fund would pay out or not. To meet both of these ob- jections the League farmers determined to work out a plan whereby the premiums would be assessed, like taxes, against the property benefited, and to make the premiums fit the hail losses at the end of the season instead of attempt- ing to guess in advance, each year, what hail losses probably would be. 2 Under the North Dakota law.of 1919 assessors are required to list, at the beginning of the season, all tillable property in the state. Such property is taxed at the flat rate of 3 cents per acre, as a start toward providing against hail losses. This tax falls equally upon lands being cropped and those held idle for speculative purposes. It makes the specula- tor bear a fair share of the burden of crop insur- ance, which increases the value of his own lands, as well as those of the actual farmers. There were listed this year in North Dakota 28,016,456 acres of tillable land. The 8-cent tax, therefore, brought in $840,493 as a starter. The 1919 law goes on to provide that such of this- tillable land as is actually cropped will be assessed, Christmas _ %, PAGE FIVE L O T A A P A R S A I B S D S. A. Olsness, state insurance com- missioner of North Dakota. at the end of the season, a sufficient amount to meet all hail losses, on the basis of $7 per acre. There is provision, however, by which property can be withdrawn, before the hail season starts, if the owners desire to caryy their own insurance or to insure with private companies. After all withdrawals had been made and all property had been taken out that would not be crop- ped, there remained 12,-. 467,130 acres under full state insurance this year. HEAVIEST LOSSES IN NORTHEAST The first hail storm of the season occurred June 12 in the southwestern part of the statée. After this they came thick and fast. Anti-League members in the legislature had criticized the League bill, making the same assessment throughout the state, because they claimed ° that the hail risk was much greater in the western part of the state, especially west of the Missouri river. But the experience of 1919 did not bear out this claim. The heaviest hail losses in the state were reported from Pembina, Cava- lier, Traill, Grand Forks, Steele, Griggs and Benson counties, all in the northeastern corner of the state. Next year the heaviest losses possibly may be in the southwest, thus showing the impossibility of guessing in advance which part of the state carries the highest risk. There were a total of 12,- the state. The amount of the losses, as reported by the state adjusters (with a maximum allowable of $7 per acre), was $3,419,924. With $840,493 already on hand from the 3 cent flat tax on the total tillable area, if was found that a second assessment of only 25 cents an acre would be necessary on the 12,467,130 acres remaining under the law. This will not only pay all expenses of administration, amounting to less than $75,000, but will also provide $75,000 to meet interest on the 852 losses reported throughout ° et warrants issued in payment of losses, in anticipa- - .| _ tion of tax receipts, and $60,000 for cost of admm- istration for next year. : The total amount of hail insurance thus paid by the farmers under the law this year was 28 cents an acre for $7 worth of protection, or 4 per cent, as compared with the 10 ‘per cent rate of the private companies. Furthermore, the farm- ers do not have to pay cash in advance for their premiums, any more than they did with the private companies, and they know in advance _exactly what they can count upon in case of loss, instead of having to take a chance and guess on it as they did under the old system of state insurance. The chief factors responsxble for this lowering of hail insurance rates are elimination of private profits and reduction of operating expense. .The (Continued on page 14) S P o B T o R ST a4y R T A |