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Now, gentlemen, in the administration of property taxes and time, forest land has not been considered insurable property; hence eration. The increasing value of stumpage and the increasing fire Berlin Mills Company, one of the large stumpage-owning corporations in the East, has been doing some pioneer work on a plan for the mutual insurance of timberlands, and this work is attracting the attention of woodland owners all over the East. Just at this moment the plan is being put in operation in the State of New Hampshire, and the result will be of course watched with the keenest interest by all interested in forests and forestry.

Mr. Brown has prepared a paper on the subject which he planned to come here and read to us, but some few days ago he wrote me it would be impossible for him to be here to-day, and he has sent here, in his place, Mr. de Carteret, the Treasurer and Manager of the Timberlands Mutual Fire Insurance Company, who is one of the men "behind the gun," and he will favor us by reading Mr. Brown's paper. It is a great pleasure to introduce Mr. de Carteret, who is eminently well qualified to address us on this important subject. (Applause.)



For the convenience of the members of the committees whom the Chair is to appoint, I want to announce at this time the appointment of two committees: one on resolutions,—Mr. V. K. Kellogg, Mr. Ferris J. Meigs and Mr. W. L. Sykes; and one on nominations, -Mr. Frank A. Cutting, Mr. James L. Jacobs and Mr. T. J. Wilber. These committees will report at the end of the afternoon session:

MR. FRANK A. CUTTING: I think the President will do well to excuse me on that committee. I have been on the Nominating Committee for several years.

THE PRESIDENT: Perhaps we know what your habits are. (Laughter.) No. I don't think that we can excuse you, Mr. Cutting We want you on the committee. insurance

go hand in hand, but unfortunately, until a most recent the subject of insurance on timberlands has received scant considprotection have brought the subject up recently in a more favorable light from

an insurance standpoint, and Mr. W. R. Brown, of the

MR. S. LAURENCE DE CARTERET: Mr. Presideit and gentlemen,

I regret that Mr. Brown was not able to be here, because I know he would have enjoyed meeting with you, as I do, and I know you would have enjoyed having him here and having him address you. I hope you will find this paper of his of interest, which I will now read. (Reading.)


don commenced to write standing timber insurance west of the

A comparison of these figures appeared to prove conclusively that the annual loss from fire in protected areas in New England often was a great deal less. Statistics gathered from the far West. the Lake States and Canada also confirmed this view, although favorably with the loss by fire in other forms of property.

The average premium rate on all classes of risks throughout the United States is a very little more than 1 per cent., of which approximately 55 per cent is expended in settling losses, and 45 per cent for management, taxes and other expenses.

Standing timber receiving state and private protection is not subject to a greater average annual percentage of loss than the average of other classes of property. It is therefore reasonable to believe that a yearly charge of 1 per cent. will defray the settlement of losses and cost of management, the premium charged in excess of this amount being used to build up necessary reserves and there. after being refunded to policy holders in the form of dividends. In the spring of 1916 the Phoenix Assurance Company of Lon



BERLIN MILLS CO. I would like to present to the timberland owners of New York an outline of the Timber Lands Mutual Fire Insurance Company · which has recently been formed in New Hampshire, the principles upon which it operates, the advantages which are now available for owners to benefit by, and the opportunity to firmly establish the principle of forest insurance in the interest of all those who own or deal in timberlands.

For those who have not followed the matter up to its present status I will state that the idea of insuring standing timber in this country was developed out of the observation of data which had been collected for the previous six years by the various State and private fire protective organizations, and from the conclusions drawn by comparisons of the extent of fires, their frequency, the situations where they occurred and the values destroyed. had never exceeded 42 of 1 per cent of the value, yearly, and losses were more variable. The loss of 12 of 1 per cent. compares

Rocky Mountains at 142 per cent., with a reduction in rate of onethird, in territories where approved forest protection is installed, making a net rate of 1 per cent in protected areas.

In view of these findings a number of gentlemen were interested to form a mutual organization for the purpose and the Timber Lands Mutual Fire Insurance Company was incorporated by act of the New Hampshire Legislature in February last.

The State Insurance Department recommended a guaranty capital of $50,000 which was subscribed by the present directors. The plan of operation was submitted to the State Insurance Commissioner and to Mr. Alfred M. Best of New York, both of whom commented favorably on same and the enterprise has received their continued interest.

The Company received its license "to transact the business of insurance against loss and damage upon property by fire, lightning and other destructive elements” at the end of May and commenced issuing policies on July 1st.

The points of greatest interest to you are: (1) On what basis is the Company doing business? (2) What has been accomplished in the past 4 months ? (3) How can we co-operate with you to mutual advantage ? (4) The possibilities which timberland insurance offers.

PRESENT BASIS OF BUSINESS Risks must be separted from each other either by clearings and openings which will serve as fire breaks, or if the risks are in unbroken timber the specific parts covered must be approximately a mile apart. In this manner a wide distribution of risk is obtained and the Company is protected against large losses in case of a conflagration.

Tracts exposed to railroads and recent slashings are accepted.

Tracts are inspected by foresters in the employ of the Company before policies are issued.

A cash premium deposit of 2 per cent is charged on all risks covered.

Values are determined between the owner and the Company at the time the policy is written, merchantable timber being insured on the basis of an estimate of the total amount of timber which is large enough to make pulp or logs, and its stumpage value per thousand feet or per cord.

Natural young growth and plantations are insured on the acreage basis, at an agreed value per acre.

The stumpage value of merchantable timber is fairly easily arrived at in any particular location, but difficulties are confronted in


placing a value on unmerchantable young growth on which there is no recognized market value.

As a basis for insuring young pine natural reproduction up to 25 years of age, we have made a rough table in which values vary from $3 to $40 per acre according to age, quality and general condition.

Plantations are varued on the basis of their production cost in which we include cost of transplants, planting expenses, interest on these two items compounded at 5 per cent. and interest compounded at the same rate on a low valuation of the site. For example, a plantation set out 9 years ago at a cost of $10 per acre, on land valued at $4 per acre, would now have an insurable value of $17.72 per acre, on this basis of figuring.

Either partial or full insurance may be carried within the limi of line written.

A 90 per cent. Average Clause is embodied in the policy and in the case of partial insurance the policy holder is an insurer for the balance, and to that extent must bear his proportion of any loss.

The New Hampshire Standard Form of Policy is used with such riders attached as are necessary to effect this form of insurance.

Arrangements have been made with old line insurance companies to write additional amounts in excess of $5,000 on tracts covered in part by this Company, at a net rate approximating 112 per cent. Thus facilities are available by which fairly large tracts may be fully covered.

WHAT HAS BEEN ACCOMPLISHED The profession of Forest Actuary had necessarily to be created and the best available data collected as to the relative hazard in old growth, second growth and plantations, also the relative danger in the various towns of the State and the danger due to location, as for instance, proximity to railroads, exposure to slash, picnicers, fishermen, and campers, etc.

Before any risks were accepted a study was made in collaboration with the State Forester of all fires reported in New Hampshire for the six years 1911-1916 inclusive and tables compiled for each town showing the average annual loss in dollars resulting from railroad fires and from fires of other origin.

This information was then plotted on maps which show at a glance the relative desirability of risks in the various towns, and the towns which should be avoided because of their bad fire record.

Similar data has been compiled for Massachusetts and we feel confident that the forestry departments of other states will co-oper...

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