Our Firemen, The History of the NY Fire Departments
Chapter 54, Part I
By Holice and Debbie
FIRE INSURANCE: ITS BENEFICENCE AND IMPORTANCE.
The Great Benevolent Society. -- Blest Offspring of Modern Civilization. -- the Friend of the Poor,The guardian of the Helpless, the Protector of Home, the Safeguard of Honorable Competition.
Many volumes each the size of this work would be required to give the history of Fire Insurance and the Board of Fire Underwriters. The united companies virtually control, as mentors and censors, not only the Fire Department of new York, but in a certain sense the men and methods connected with Fire Extinguishing in the United States, and they are to be regarded as managers in the pay of the tax payers. It is not within the scope of this work to present anything like a full history of the board, but a brief sketch will be necessary and interesting.
One of the best retrospects of combined insurance interest as in a address made in this city on the 26th of April, 1876, to the National Board of Fire Underwriters of the United States, by Henry A Oakley, Esq., if the Howard Insurance Company, President of the Board. Mr. Oakley regretted that a proposition to erect in the Centennial Grounds, in Philadelphia, a building wherein insurance men could meet, and another building wherein the statistics of fire insurance business un this country during the century should be collected were not carried out. "Fire insurance," he went on to say, "can scarcely claim to have been known in the early part of our nation's history. Philadelphia is entitled to the honor of having established the first fire insurance company in America, for in 1752 the Philadelphia Contributionship, or, as it is sometimes styled, 'Hand in Hand,' was founded, a company still in prosperous existence, and whose chief promoter, and one of whose original directors was Benjamin Franklin. This company celebrated its Centennial nearly a quarter of a century ago, and shows evidence to-day of the wise management which characterized its early career. Differences, however, seem to have arisen among its trustees as to the exposure of property by the trees which at that early date must have been a feature in the City of Brotherly Love, and from the attraction they presented to lightning, the company ceased to insure property which had trees in front of it. The result was a new organization in 1784, by some of the promoters of the first and other prominent citizens, called the Mutual Insurance Company, which adopted as its seal or mark, a tree in leaf which gave to it the name of the 'Green Tree,' by which it is familiarly known, and its plate bearing this badge is still affixed to houses. In the year 1787 another company bearing the same name--Mutual Assurance Company--was founded in New York, and it still exists with the very appropriate title of the 'Knickerbocker Fire Insurance Company.'
"The next organization was the Insurance Company of North America, of Philadelphia, founded in 1794 on the stock plan, whose representatives are among us to-day as active, earnest promoters of this Board. In 1797 the Massachusetts Fire Company was chartered in Boston, but it long since passed out of existence, and in 1798, in the same city, the Massachusetts Mutual was organized, and after having weathered many storms ceased to exist in 1872, as a result of the great fire. There was established in the town of Boston, in 1724, 'the sun fire Office in Boston.' By Joseph Marion, and also about the same period 'The North American Insurance Company,' whose exact date it appears impossible to obtain. Both of these companies are supposed to have been individual enterprises, as no record of their incorporation an be found. New York in 1806 the Eagle Fire, still extant, and in 1810 Hartford organized its pioneer company, 'The Hartford Fire insurance Company,' whose importance to us and the public generally we all feel disposed to recognize. Mr. Cornelius Walford, of London, in a paper which I had the pleasure of hearing him read before the Middlesex Archaeological Society, made known the fact of the existence of mutual fire associations for two centuries or more before the great fire of London of 1666, while on the continent of Europe individual underwriting ws known as far back of the twelfth century. On his curious and interesting article in the Insurance Cyclopaedia on 'Fire Insurance,' he has gathered the early history of fire underwriting into a compact form. He states that the first company really formed in England was in 1680, called the Fire Office, afterward the Phoenix; this was followed in 1683 by another, which seems to have been a formidable rival, and was called the Friendly Society. These companies were only organized for the insurance for buildings. The first company charter to insure merchandise and other personal property was the Lombard in 1704. In 1710 the Sun Fire Office was established, followed in 1714 by the Union, in 1711 by the Hand in Hand, in 1717 by the Westminster, in 1720 by the London Assurance Corporation, and in 1721 by the Royal Exchange. * * * * The System of association in boards is as old as the business itself. I was told in London that such an association existed in the latter half of the last century, which has been continued down in various forms to the present day, many of the companies which originated it still being members. As early as 1819 such an association was formed in the city of New York, when only eight companies were in existence, and it continued to made additions to its members until 1827, when it was merged into a regular Board of Underwriters. To show that it was to be proof against disaster either from within or without, it took the euphonious name of the 'Salamander Society.' Its records still exist and are in my possession."
On the 20th of April, 1858, at the First annual dinner of he new York Board of Fire Insurance Companies, A. B. McDonald, Esq.., of the Royal Insurance Company of Liverpool, in responding to a toast, said that the early history of the Old Association of Fire Insurance companies was involved in some obscurity, its records having perished in the fire of 1853. Of its original members not one survived, and of those who were members in 1829, when Mr. McDonald joined it, but few survived. "The rapidly increasing population and commerce of this city after the peace of 1815," continued the speaker, "led to the formation of this association about the year 1825 or 1826." Among the companies originally represented in the association, he said, were the Mutual, the first Fire insurance Company established in this State after the Revolution, a company whose records afford a curious and interesting history of the rise of fire insurance in this city, which has paid in full all just claims upon it since 1787, and still maintains a vigorous existence under its present name of Knickerbocker, the Globe, with a capital of a million dollars, the Eagle, the Washington, the Merchants, with capitals of four hundred thousand dollars each, and many others.
"The rules and regulations of the association." he continued, "were founded on two leading principles, viz.: Uniformity of Rates and Non-payment of Commissions for procuring business. The operation of these principles, which were adhered to with fidelity, elevated the Associated companies to a high position in public estimation; so great ws the confidence felt in their stability that, prior to 1835, investments in their shares were made by executors to estates and other trustees in preference to bank stocks. These principles survived the destructive conflagrations of 1835 and 1845, and on the reorganization of the companies after both calamities they were adopted as the basis of the revived Association. One period in the history of Fire insurance in this city is so full of instruction and warning as to deserve a notice. About 1843 a large increase of companies, of which a number did not connect themselves with the Association, were not governed by its rules and regulations, led to a strenuous competition for business. Several member withdrew from the Association and reduced their rates of premium. A reduction of the associated rates followed, and was succeeded by reduction after reduction to rates for below a compensation for the losses. The ruin which the companies were thus inflicting one each other was completed by the conflagration of 1845. It maybe remarked that the companies which commenced this unfortunate course were hopelessly insolvent, and were never resuscitated again."
Other authorities differ with Mr. Oakley. Some writers trace insurance back to the second Punic War, but it appears well established that the first fire insurance was contemplated in 1696, when the "Amicable" Company was established in England.
In 1858, when the "Salamanders," or Old Association of Fire insurance Companies of the City of New York, was merged in the New York Board of Fire Insurance Companies, interesting majority and minority reports were presented to the Association. In one of the reports it was stated that there were at tht time doing business of fire insurance in this city seventy-nine companies which were incorporated by the State of new York, and one incorporated by the State of new Jersey, making a total of eighty companies, employing an aggregate cash capital of sixteen millions one hundred and fifty-six thousand dollars; that there were also several mutual companies engaged largely in the same business, but the committee regarded those having cash capitals only, as being more closely allied in interest, and as having a more direct bearing upon the questions under consideration. Of the eighty companies there were forty-three with an aggregate capital of nine millions four hundred and four thousand dollars, which were associated for objects of mutual benefit, each company being subject to certain rules and restrictions adopted by such association, the remainder comprising thirty-seven companies, with an aggregate capital of six millions seven hundred and fifty-two thousand dollars, had no association in common, but a large majority of them having been organized within the past eight years deemed it necessary, to ensure their success, to act independently of the association, or, in other words, to place their capital indirect competition with that represented in the board. Among other things it was resolved tht the agreement to adhere to a standard of rates as signed by the companies not member of the association, be also signed by the member of the Board of underwriters, that a committee be appointed for the purpose of calling a convention of all the fire insurance companies of New York, Brooklyn, and Jersey City, to devise means for the adoption of a standard of rates, and that to such convention be referred also the subject of paying commissions, or modifying the then system of brokerage, or of abolishing the system altogether. The majority report was signed by W. F. Underhill, Robert D. Hart, Horatio Dorr, and John Baker.
In the majority report it was said: "One important fact must not be lost sight of, viz.: that the present standard rates are much higher in this city, taking all things in consideration,, than is charged in most, if not all, of the principal cities in the Union.. the rates charged in the city of Boston on warehouse risks are from 3/8 to 3/4 per cent. In Philadelphia, from 50 to 65 cts. In Baltimore, from 60 to 75 cts; while in this city they range from 65 to 112 cts., averaging about 85 cts. This enhanced ate in New York over the rates prevailing in other cities named, and in cities too that have a large number of home companies, has induced the establishment of numerous agencies in this city, many of the agents being authorized to take risks from 10 to 15 cts. Less than the rates charged by this association." Edward Anthony was the singer of this report.
Mr. Underhill was Secretary of the Peoples; Mr. Hart, Secretary of the Astor; Mr. Dorr, Secretary of the Atlantic, of Brooklyn; Mr. Baker, Secretary of the Mercantile, and Mr. Anthony, President of the Lamar.
The Salamander Society, an organization of fire underwriters, which existed between 1819 and 1826, had for several years no standing officers, but at the meeting a president and secretary were elected. At the time of its organization there existed eight Fire Insurance Companies, viz.: Globe, Eagle, Mutual, Franklin, Fulton, Washington, Merchants and Mechanics, and when it ceased to exist, there were in addition the Aetna, Chatham, Contributionship, Equitable, Firemen's, Farmer's Greenwich, Howard, Jefferson, Lafayette, Manhattan, North River, Phoenix, Protections, Sun, Trader's, Orange, Tradesmens' and United States. Of the Presidents were Gabriel Fuhrman, Mutual; Swords, Washington; Jackson, Globe; Edward Laight, Eagle; and Henry Rankin, father of James M. Rankin, Globe; of the companies which belonged to the association, the Aetna, Eagle, Equitable, Howard, Manhattan, and Mutual, Knickerbocker, survive. At the first meeting held January 29, 1819, it was resolved, on motion of Mr. Henderson, President of the Globe, that buildings of brick or stone covered with slate, tile or metals, and having solid iron doors and window shutters in the rear, and no building in front within 100 feet, be insured as of the first class; by Mr. Henderson, that the risks on ship chandlery be insure at the same premium as groceries.
Transcribed by Holice B. Young
HTML by Debbie
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