Conservative. 3
debt. Such a reduction would occasion
a gradual and natural contraction of
credit money which would not affect
industrial enterprise. Third , balance of
trade. He views the export of gold as
logically resulting from the realization
of a better rate of interest abroad and is
distinct from that resulting from the
exchange of commodities. Gold export
is only alarming when due to a feeling
of distrust in regard to business con
ditions at home. Fourth , value of gold
if "demonetized. " Its value would not
be disturbed. Bullion or bullion cer
tificates would take the place of the
coined product and be used as money.
The volume of gold circulating as money
would probably be the same. Mr. Yates
gives a terse and pointed analysis of the
main principles of the bill.
CONSEHVA-
TIIE VALUED
POLICY LAW.TIVK hns received
a communication ,
criticising the opposition of this paper
to the valued-policy law. Our critic
states that : "The law has been in force
in this state for several years and I do
not believe there has been any increase
in suspicious fires. I do not think the
law 'places a premium upon arson' nor
that it 'gives the indorsement of the
law to the act. " Nor do I believe it
'leads men to insure property for more
I than its real value in the hope that it
> t will burn. ' "
If the views of the CONSERVATIVE'S
correspondent were supported by facts
and upheld by fire statistics they
would make a strong case against the
repeal of valued-policy laws. Uu
fortunately his statements are not cor
roborated by the testimony of the best
authorities obtainable in fire insurance ,
viz. , state insurance commissioners.
Mr. A. F. Dean , in his work upon the
Rationale of Fire Insurance , says :
"That the law has raised the aggre
gate cost of fire insurance to the Ameri
can people ; that it
Increases Fires. . . . . .
is the direct cause
of an untold amount of arson , perjury ,
and murder , no one familiar with fire
statistics can for an instant doubt. The
dangers of the law to life , property and
morals have repeatedly been pointed out
by state officials. During the past year ,
on the ground that it offered an incen
tive to crime , the law was vetoed by the
governors of Colorado , Nevada , and
Utah , and the governor of West Vir
ginia refused his signature. In his last
annual report , the insurance com
missioner of Ohio published statistics
showing the increase in fire losses in that
state since the enactment of the law
and ends with the following comment
I have no hesitation in believing thai
over-insurance , sanctioned and en
couraged by the valued-policy law , is
the cause of the greater portion of this
increased fire waste , and that this un
necessary waste will continue and grow
worse so long as this statute remains a
part of the insurance code. '
"The state insurance commissioner of
Michigan , in his last annual report , con
demns the law in language equally
strongnnd estimates the losses from mor
al hazard , arising from over-insurance in
lis state , at twenty-five per cent of the
aggregate fire waste ; in other words ,
; hat incendiarism is the cause of one
Ire out of every four.
"The long law-sanctioned reign of
Thngee in India seems incredible to Am
erican intelligence , yet American legis
lation has unchained an influence no less
destructive to life , property and morals.
The Thug needed for his work at least a
modicum of physical courage ; the fire
bug does not. The Thug cuts his victims'
throats with neatness and dispatch , one
at a time ; the bug subjects his victims ,
regardless of age or sex , to the slow
tortures of fire , a houseful of people at
a time. "
This testimony , of the insurance com
missioners of the several states in which
_ , , . . . valued-policy laws
Misrepresentation
Iklnile Lawful.ftre lu VOgUO
shows that the law
has resulted in increasing suspicious fires
and consequently increased the fire rate ;
that it has "placed a premium upon
arson ; " and that it "leads men to insure
property for more than its real value in
the hope that it will burn. "
Only dishonest and unscrupulous men
will misrepresent the value of the prop
erty insured. Honest insurers report
the true valuation. As the law in
creases fire rates it is then in favor of
the dishonest insurer , and opposed to the
interests of the honest policy holder. Mis
representation in any other contract
constitutes fraud and vitiates the con
tract. In an insurance contract it is
made legal and the companies are hole
responsible for losses by reason of it. Is
there any reason why a different prin
ciple should be applied to a policy of fire
insurance than is applicable to other
forms of contract ? We believe that the
public interest would be best conserved
by repealing the valued policy law and
having the state insurance department
exercise greater diligence and make more
careful and thorough inquiry into the
character and integrity of the men ap
plying for agent's certificates. This
would better protect the community
from the acts of dishonest agents than
a law which enables dishonest agents
and dishonest insurers to mutually profit
the former by reason of the larger
premium and the latter because of the
over-valuation.
RAILROADS AS _
PRODUCERS.Producers" is the
name of a pam
phlet , issued by George Frazee , of Bur
lington , Iowa , that deals with railroads
as joint producers of the products they
, ransport. In order for a thing to have
value it must be of use. This capability
of use means not only that the article in
tself must be useful but that it must bo
accessible to the consumer. The process
of production is not complete until the
product is placed within reach of the
one intended to use it. Transportation
is then a factor in production. The
transportation of wheat from the Dakotas
to the eastern consumers is just as much
a part of its production as is the labor
of the farmer in tilling the soil , sowing
the seed and harvesting the crop. Trans
portation in many cases is the most
important factor in this joint production
and contributes most to the value of the
thing produced.
Mr. Frazee reviews the industrial
growth of this country from 18GO to
1890 , the period of
Increase
In Wealth.
great railway con
struction , and shows how population
doubled and wealth increased over four
fold. That which contributed most to
this enormous increase in wealth was
the improved facilities of transportation.
It was the railways that converted what
was once a barren tract west of the
Missouri into fertile fields , wonderfully
prolific , and made possible the establish
ment of beautiful and happy homes for
millions of people. These railways gave
value to the surplus products of the soil
which otherwise would have been with
out value.
In support of his theory of production
Mr. Frazoe cites Professor Ely of the
chair of political
Professor Ely.
economy in the
University of Wisconsin :
"The farmer in changing the places
of things , gives direction to forces of
nature , and the result is new combina
tions of matter which add to our stock
of economic goods. The operations of
those engaged in transportation add new
properties to goods , for example , the
property of being in places where they
are most wanted. Particles of earth
have no value as human food while they
are mixed with the soil , but when they
are taken up into wheat or potatoes they
have value , provided they are in the
right place at the right time. "
Mr. Frazee makes a strong case against
the theory of the old economists who
taught that the farmer was the only real
producer. After reading his pamphlet
and realizing more completely what the
railroads have done to increase the
wealth of all the people , one has less
patience with the demagogic agitation
against , and wholesale denunciation of ,
railway corporations. It is difficult to
understand why that , which is so in
separable from the industrial life of the
community and contributes so much to
the wealth of each individual member
of it , should be so insanely regarded as
hostile to public interests ,
