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Mr. King declared that Fair Oaks had not developed in keeping with its natural resources since the advent of the gold dredger. He stated Fair Oaks people believe the present methods of conducting dredge operations to be a menace to agriculture in California. He said he regarded the Kehoe bill as a very modest one under the circumstances, and held that it should be passed.

“If it is a good thing to conserve our water and our forests," concluded King, "is it not also a good thing to preserve the lands on which the future generations are to make their living ?**

Judge Charles W. Slack, who does not live at Fair Oaks, but at San Francisco; who is not a farmer, but general counsel for the gold dredging concern known as the Natomas Consolidated of California—which no doubt fees him generously-spoke strongly against the bill's passage.

He contended that under the terms of the measure it would be possible for a biased commission to work the dredge-mining industry great injury. He predicted that should the Kehoe bill be enacted, dredger companies would go into the hands of receivers.168

Judge Slack did not go so far in direful predictions, however, as did State Mineralogist Hamilton. Hamilton contended that the passage of the bill would lead to the closing of the United States mint at San Francisco.

Under Senator Kehoe's somewhat sarcastic cross

168 The extravagant claims of the opponents of the bill led to amusing contradictions. They had contended, for example, that, after dredging, the land, in spite of the piled cobble stones, could be restored for agricultural uses. On the other hand, Judge Slack made the point that in providing that agricultural land upturned by dredging operations shall be restored to the same degree of usefulness and fertility as it originally possessed, the Kehoe bill required something impossible.

examination, however, Hamilton admitted that if the dredging operations at Hammonton, Yuba County, and in the Natomas fields were permitted to continue under the proposed regulations of the Kehoe bill, the mint would not close this year nor next year.

Senator Boynton, who led the opposition against the measure in the Senate, reviewed the history of the gold dredging industry. He contended that but for this industry, reclamation projects in the Sacramento Valley would have been delayed for ten years. He insisted in conclusion that sentiment alone dictated the passage of the Kehoe bill.

[The Kehoe bill met much the same fate as did the anti-dredge mining bill of 1905. The Committee on Agriculture sent it back to the Senate with the recommendation that it do not pass. In the Senate only four votes were cast for it; thirty-one votes were cast against

it. 789

169 The vote by which the Kehoe Dredge Mining bill was defeated was:

For the bill-Brown, Carr, Grant, and Kehoe-4.

Against the bill-Anderson, Avey, Beban, Benson, Birdsall, Boynton, Breed, Butler, Caminetti, Campbell, Cartwright, Cohn, Finn, Flint, Gates, Gerdes, Hans, Hewitt, Jones, Juilliard, Larkins, Lyon, Mott, Owens, Rush, Sanford, Shanahan, Strobridge, Thompson, Tyrrell, and Wright-31.

Senator Caminetti explained his vote with the statement that he had been exhorted by his constituents to oppose the bill. If he voted against the wishes of The People of his district, he said, he would be denying them representation on the floor.

A telegram from Congressman Kent, who was then at Washington, urging the measure's passage, was read during the debate.

"From this end of the line," said Kent, “it would seem strange that California asks millions for Government co-operation in reclamation projects, while, at the same time, permitting, under State law, the destruction of some of the most valuable land in the State by the gold dredgers. This destruction represents short-sightedness, inconceivable folly.

The short-lived individual ought not to be permitted to destroy the common assets of the State, nor to so use or to abuse his property that others may be injured by that abuse. If this common law doctrine does not apply to future generations then it is meaningless and sterile. Nothing could be more reasonable than to demand the carrying out of this fundamental principle of law and social order.'

CHAPTER XIV.

THE INSURANCE BILLS.

A week or ten days after the members of the 1913 Legislature had been elected, representatives of large fire insurance companies began taking the legislatorselect out to luncheon. During the constitutional recess, legislators were invited to receptions, where insurance officials were introduced as the guests of honor. And the one thing impressed upon the legislator given a meal or invited to reception, was, that the insurance companies wanted only fair treatment at the hands of the Legislature.

That was reasonable enough.

But the writer knows of no instance where the general public, by deputy or otherwise, took a member of the Legislature out to dine, or invited him to a reception, for the purpose of telling him that all the public wants is fair treatment from the insurance companies.

But in spite of the assurances of "fairness" from the underwriters' representatives on the Pacific Coast, about the time the Legislature opened, from two independent sources came protestations that the insurance companies, as represented in California, are anything but fair.

These expressions of dissatisfaction came:

(1) From The People of San Francisco, who alleged insurance rates in that city are disproportionately high. (2) From local fire insurance agents, who claimed inequitable treatment from the underwriters.

The dissatisfaction of The People of San Francisco found its chief expression through the Mission Promotion Association of that city.170 The insurance agents were united in an organization of some 700 members, known as the California State Association of Local

170 The Mission Promotion Association appointed a committee consisting of Matt I. Sullivan and Eustace Cullinan to inquire into insurance conditions. In a report filed with the Association, this committee alleged that on forty typical cases taken in the business portion of the Mission district, the insurance rates ranged from 2 to 9 25-100 per cent. per annum of the amount of the risk. The report contained allegations that fire insurance rates are higher in San Francisco than in any other city of more than 100,000 inhabitants in the country, and that "during six years beginning July 1, 1906, and ending June 30, 1912, according to reports filed by 108 fire insurance companies, premiums collected by them in San Francisco amounted to $30,000,000; while the losses incurred by the same companies during the same period amounted to $4,750,000, showing a total of premiums in excess of losses amounting to $25,250,000.”

The further allegations were made that in California in 1905 the ratio of losses to premiums collected was 3743 per cent.; that by 1911 the ratio had dropped to 2812 per cent. "Although, says the report, "the ratio of losses to premiums in California is considerably less than that of any of the Eastern States, the rates charged in California are greatly in excess of Eastern rates; that whereas the average rate at San Francisco was, in 1905, 1.02 per cent., the average rate there is now 1.90 per cent.; that this is nearly three times the rate charged in some of the Eastern cities."

The report contained the following comparative table, showing net fire premiums received in various cities and losses paid for the year 1910, reported to the State insurance departments of New York:

Rate

per $100 Population. Premiums. Losses. Charged. Baltimore

558,000 $ 2,095,134 $ 671,310 $1.01 Boston 570,000 4,293,268 3,108,499

.83 Brooklyn, N. Y. . 1,697,000 4,972,251 1,934,870

.66 Chicago

.2,185,283 11,975,798 5,998,864 1.08 Kansas City. 248,000 1,385,801 1,045,779

.98 Milwaukee 373,000 2,042,227

740,155

.95 Minneapolis 301,400 1,852,440 1,957,201

.98 Newark, N. j.. 347, 469 1,685,896 1,056,806 1.11 New Orleans. 339,000 1,508,828

791,410 1.15 Philadelphia .1,549,000 5,289,325 2,481,884

.88 St. Louis.

687,029 3,048,623 1,274,681 .97 St. Paul. 214,000 1,030,989

703,052

.99 New York City. 4,766,883 20,085,850 8,145,961

.68 SAN FRANCISCO.... 416,912 4,979,653 800,581 1.95

Note.-The above figures taken from Insurance Year Book for 1911, on page 544.

Fire Insurance Agents. The principal representation of the underwriters came through their organization, the Board of Fire Underwriters of the Pacific.171

Thus, the three elements involved in the contest over the insurance measures considered at the 1913 session,

171 The State Insurance Commissioner in a statement sent out while the Legislature was in session, said of the Board of Fire Underwriters of the Pacific:

“There are at the present time approximately 135 companies, exclusive of mutual companies, engaged (in this State) in the (fire insurance) business and regularly licensed by the Insurance Commissioner. Of these, some eighty are members of the so-called Fire Underwriters of the Pacific. The remainder are the so-called independent or non-board companies. The Underwriters or Board companies are those which are associated together for the purpose ostensibly of:

(1) Equitable adjustment of rates to hazards.
(2) Encouragement of improved methods of construction.

(3) Reduction of expense by co-operation in survey, etc., so as to secure reasonable profit to its members.

"In addition they co-operate with one another in the limitation of the number of agencies, control of agents' commissions, prevention of rate cutting, and in a general way vouch one another's stability.

"The essential and fundamental purpose of the board, and one which more than any other, perhaps, may be said to be its most important function, is the maintenance of its rating bureau which provides a standard of classification for all risks, fixes rates and provides the expert service necessary for the application of rates to risks.

"The Board is a private concern over which, at the present time, the Insurance Commissioner has no control, and, presumably, its activities and standards are those which conform to the interests and standards of its membership."

The committee appointed by the Mission Promotion Association to investigate fire insurance conditions, reported the Board of Fire Underwriters to be a trust, “responsible for the extortionate rates of insurance charged

throughout the State." The report set forth:

"Fire insurance rates now imposed upon the insuring public, are grossly excessive, and in many instances prohibitive. They are fixed by a combination of insurance companies known as the Board of Fire Underwriters of the Pacific. Eighty-four insurance companies doing business in this State are members of the combination. Thirty-eight companies, unimportant, with the exception of two or three, known as 'Non-Board' companies, are not represented in the Board, and are, therefore, not bound by its rules and regulations. 'Non-Board' companies generally charge rates slightly lower than those fixed by the combination. We are informed that there is a tacit understanding between the 'NonBoard' companies and the combination, pursuant to which no serious cutting of rates is practised. The Board of Underwriters, as constituted, is nothing more nor less than a formidable trust, which is responsible for the extortionate rates of insurance charged in the City and County of San Francisco and throughout the State of California."

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