Mr. H. H. McLEAN.
I second that motion. I think that some hon. members do not understand the nature of these mutual companies and seem to think that they are desirous of doing business in Canada. That is not the case. They are formejjl of, say, some 20 cotton mill companies combining to insure each other, and the only officers they have are a secretary and an inspector. We have not in Canada sufficient cotton mill companies to form such a circuit, and therefore it is necessary to apply to some of the New England Mutuals to get into the circle with them. Before these mutuals will insure, very strict regulations have to be complied with. Each establishment must have its own water supply and sprinkling system and other
appliances, all of which add to the cost of the property, but on the other hand the cost of insurance is very cheap, one-eighth or one-tenth of one per cent. It has been said that the stock companies in Canada are anxious to get that class of insurance; but I know that in the past, before we could go to the New England Mutuals, our stock companies would not take such risks under one or one and a quarter per cent. Now, these companies are willing to take that insurance cheaper, but not at anything like the rates charged by the New England Mutuals. Then our stock companies have not that system of inspectors and consequently cannot provide the same inspection. Another advantage about the inspection is this. A cotton mill is a hazardous risk unless equipped according to the regulations of these mutual associations, and besides if a mill takes fire, which is not fitted up with; this equipment, there is greater danger to the adjacent properties. But the mills which are properly equipped and subject to this inspection are practically very seldom burnt and there is nothing like the same danger to adjoining property. As regards the principle stated by the Minister of Finance, it would seem right and proper that there should be a small tax imposed, starting with say 5 per cent. Then there are the woollen mills, which are a hazardous risk, which the New England Mutuals will insure, and there are also the saw mills. In New Brunswick a saw mill operated by steam would pay up to seven per cent premium, whereas they may be able to get their insurance from the mutuals at four or five per cent. This additional tax of 15 cents on every hundred dollars of the premium would therefore be a large increase. It would amount to $100 or $150 according to the amount oi insurance carried. These mutual companies are incorrectly described as companies. They are really associations, or a partnership, so to speak, among say 20 companies, which agree to mutually insure each other, and each association has only, as I have said, two officers. Again take Lloyds, that does a great deal of inland marine insurance, and this Bill does not interfere with Lloyds taking risks of that class. If we establish the principle of imposing a tax, we should begin with a small tax of say five per cent, then see how that works out, and if found necessary to make any change, that could be made later on.
Topic: JAMBS P. MURRAY,