ALL FIRE LOSSES ULTIMATELY BORNE BY THE PUBLIC.

Evening Star, Issue 3690, 20 July 1875, Page 3

ALL FIRE LOSSES ULTIMATELY BORNE BY THE PUBLIC.

The following is from an address to the Acfcurial Society of Edinburgh by John M. McCandlisii, F.K.S E.;— * In some countries the damage done by tire to buildings, if not to other property, is made good at the expense of the State or the municipality, and provided for, like other general expenses, by a tax. Tide, in fact, is simply a mutual insurance scheme, managed by the public authorities, and is open to many objections. We prefer in this country the plan of distribution by means of joint stock companies under private management. But this docs not alter the incidence of the loss. I observe frequently an advertisement by one great office that it has paid nine millions sterling on account of losses by tire. Its own capital is not stated, but it is unlikely to have exceeded one million sterling, and it still no doubt possesses all the capital it ever did, and possibly much more. It cannot, therefore, have paid the nine millions out of its own funds. It has simply been the medium by which they have been transferred from the pockets of one set of people to those of another. And so with all other fire offices. None can have existed long without having paid away far more than its own original funds, and yet these funds may remain in its hands, and may have increased instead of diminished. In short, it is plain that all losses by fire occurring to property which is insured, all the cost of distributing these losses, must be, and aie borne by the owners of such property themselves. Look for a moment at what would bo the consequence if the public did not bear this burden. The funds of the insurance offices, large as they are, would gradually melt away, and if no remedy were found, these companies, with the benefits which they confer ou the public, would cease to exist. But long before that happened, they would find the means of protecting themselves, by simply refusing to renew their contracts, except at greatly increased rates. It is possible, of course, for a company to persist in running risks and incurring losses and expenses, without obtaining adequate remuneration from the persons insured, and so to involve itself in ruin. If many offices pursued so foolish a course, their place would soon know them no more, the public would have a smaller choice of offices with which to insure, and the remaining offices would find it more easy to exact what rales they pleased. But, practically, all offices endeavor to adjust their rates of charge to the amount of the claims they find they have to sustain; and communities which permit many fires to prevail within their boundaries have in the end to repay to the offices, in tho shape of increased rates the losses which these may have occasioned. This process goes on almost from day to day, and within a few years many large cities have afforded illustration of the system. Perhaps a careless style of building has been permitted, or an inefficient guardianship, or dangerous mixing up of goods and processes of manufacture; or there has been au inadequate supply of water, or defective arrangements for extinguishing fires. The consequence has been that fires have abounded. Some offices have withdrawn themselves altogether from the locality, or the class of business, and the rest have largely increased their rates. London itself (its city business) is one example. Liverpool, Glasgow, Dublin, Belfast, and Dundee are others. In several, if not in all of these cases, the communities have profited by the lesson taught them, and set to work to remove or modify the causes of fires ; and their prudence has been rewarded by a re turn to more moderate rates of insurance. In this way rates and losses are made to balance each other, and thus all the loss and expense occasioned by tires, although borne in the first instance by the offices, fall ultimately upon the public.