STATE FIRE OFFICE

New Zealand Times, Volume XLIV, Issue 10355, 12 August 1919, Page 6

STATE FIRE OFFICE

iI£VV PREMISES

SPEECHES AT FOUNDATION

STONE LAYING

There was a largo attendance yesterday morning at the ceremony of laying the foundation-stone for the new State Fire insurance Offices, to- ho erected at the corner of L.unbcon quay and Waring Taylor street. Among these present were tho Right Hon. \V. !•. Massey (Prime Minister;, tho Hon. W. D. S." MacDonald (Minister in Charge ol tho State Fire Insurance Department), the Hon. G. W. Russell (inmsler tor Public Health and Internal Ahairs), the Mayor (Mr J. P. Duke, ijtf Colonel Collins, 0.15., Messrs 15. A. Wrightr M.P., T. Forsyth (chairman of -Education Board), J. U.. Harkness (chairman of Harbour Board), -D) Xteakos (Director of the Agricultural Department), and Messrs F. S. Bope (Secretary for Agriculture) »> •- 1 Montgomery (Comptroller of Customs), X. H. Richardson (Commissioner. State Life ThsnranCe Department), C. R. O. Robieson (general manager. State 1- ir-' Office))' *“B. -H- Morris (assistant secretary to tho Post Offico), and J. ilislop (Under-Secretary for Internal Atfaifs). .The Hon. IV. D. S. MacDonald performed. the ceremony with a silver trowel-- suitably inscribed. The inscription on tho stone reads as follows: —“Thisstono mas laid by the-Hon. W. D. S. MacDonald, Minister for State Fire Insurance, Agriculture, and Mines on the 11th August, 1919. State i’ire Insurance Board. —The Hon. .W. D. S. MacDonald (chairman), C. 11. C- Robieson, J. H. Richardson, M.C., J. W. A, Marchant, C. K. N. Wright. General manager, C. R. CRobieson. Deputy general manager, J. H. Jorram. —Architects, Hoggnrd, Prouse, and Gammer, A.R.1.8.A. Omtrnctors, the Hansford and Mills Construction Company, Ltd.” REPLY TO CRITICISM.

Declaring the stone 'veil and truly laid, Mr MacDonald said that he was delighted to see so many gentlemen interested in the ’ very important ceremony. There had been some criticism i with regard to the new building, hut the business of the -State hire Office had grown greatly throughout the Do minion, and some five or six years ago the manager thought that it was necessary to have a better building for ■"the" accommodation* and work of the staff, and the carrying out of the business. That site, which ho thought everybody would admit was one'of the finest in Wellington, had been purchased for the-State hire Insurance Office some years ago by Sir Francis Bell, then Minister in charge of the department : and when ho (the speaker) took , over the administration of the department, it was decided that the building was to go on. Competitive plans were called for, there were eleven competitors, and the first prizo went to Messrs Hoggard, and Gummer, according to whose plans the new offices « were to be built. '■ THE NEW BUILDING.

The design,, the form of construction, and finish of the building is such (stated the Minister) that it will do credit to the city of Wellington and the State hire Insurance Office. The structure is to be seven stories hign, with a pavilion tower, its totaj height being 105 feet. It will hav u a frontage of KM feet to Lambton quay and 81 feet to Waring Taylor street, with a total base area of, approximately, 10,000 square feet. The whole facade will be faced with Kairuru marble from the Nelson district. The form of construction is of the most modern earthquake and fire-resisting type, commonly used in America in very much higher buildings. The frame is entirely of steel, with walla of brick faced with marble, and floors of reinforced concrete. Except for doors and door frames there is practically no wood used in the building. Special attention has been given to lighting and ventilation. A handsome entrance on the corner will give direct access to the State Fire Insurance public office. There will also be a spacious entrance on -Lambton quay and another on Waring Taylor street, each giving access to stairway and automatic electric lift to the upper floors. The successful contractors are the Hansford and - ‘■■(Mills Construction Company, and (the. Minister said ho felt sure that they can be relied upon to complete the building in a first-class manner. The building will be much larger than is required for the operations of

the State Fire Office in the immediate futnreC' said Mr MacDonald, but it _ißU.it be remembered that this office is merely in its infancy, and great expansion of the business must ho expected ■with the growth of the Dominion's population and its commercial expansion. An effort has been made to ' ‘ gauge that future growth, and to adequately proride for it. Apart from this aspect, it is certain to prove a good investment for the reserve funds which it is necessary for the office to accumulate for the purpose of safeguarding its ever-increasing liabilities dno to rapid expansion of the sum underwritten each year. This sum during tho present year will exceed £25,000,000. But there is still another reason, an ill-important one, for tho building of so large a structure. A number of the other State departments are very inadequately housed and several others have outgrown their present accommodation ; others still are spread over several buildings, making disorganisation and uneconomical working. It became imperative to have some building where those departments could bo efficiently and economically housed, and six floors of this building will bo used for that purpose. If this building had not been erected by the State Fire Office the Government would have been faced with the erection of a similar building out of Public Works funds, and these funds are greatly needed for urgent development works which have been retarded by the war conditions. 141 YEARS’ GROWTH.

The department commenced business on January 4th, 1905, on a capital of £2OOO, which had all been expended before the doors were opened. Hut such has been its success that it has never required further financial assistance. Without any direct financial assistance from the Government, but purely its own business operations, it has repaid its initial loan with interest, and at present commands accumulated funds -of over £V3(7,000. For the first seven years the protits amounted to £12,437, and for the second seven years the profits amounted to £160,611. The total accumulated funds at the end of 1910 amounted to £214.000. The gross income of the office for 1918 amounted to last over £138,000, pjnd it

is estimated that the figures for 1010 1 will uoi be less than £145,000, or j about one-tenth of -the- total income | from the whole firo insurance business , for the Dominion. Each roar for several years past shows a greater surplus than tlm previous-year. . Tho surplus under the office’s revenue account for the year ending 1918 was £42.365; from this sum has to bo deducted £2903 from unearned premium and investment fluctuation reserve, and £13,793 for income tax, leaving a net balance on last year’s trading of £28,472. Tho income tax payable on tho past three years' operations amounted to £41,090. There has been, some demand rcconi, ly for a reduction in fire insurance rates, the-Minister remarked. It has been assorted that Hie profits were larger than necessary. It is true that the sum, of £52.000 has been added to reserves during tho past- two years, but at the same time £4,7. r )O,CCO has been added to tho underwritten liabilities of tho office. The £52,000 added to reserve is not a larger sum to safeguard the increased, liability than was necessary, the reserves held previously being insufficient. The, income tax paid during the past two years is equivalent to 13J per cent, per annum , on tho rates. Tho sum paid in incomo tax, although not a direct reduction in rates, is indirectly a reduction, for the reason that had the sum not been paid by tho State Fire Office it would have been collected in other forms of taxation. Increase in salaries due to \»re cost of living, together with increased cost- of motor-cars and cycles, and increase in cost of paper and postages, has added over £3OOO per year to tho cost of conducting the business, but the rates have remained the same —in some cases they have oven been reduced. In other words, the whole extra cost has been boruo by the office and not passed on to tho consumer, as - has been the case in nearly all other forms of commercial businesses. It is only by careful underwriting and most economical working that such good results could bo shown. The public must not forget that on the average tho rates are 25‘per cent.'' lower than was the case before'tho State' entered into tho business. .’ ' '* *

The rates in New Zealand to-day, taking into consideration the loss ratio, are lower than those of any of the Australian States. However, it Is not suggested' that the rates cannot be further reduced. The reserve funds axe now well up to requirements, and it is hoped at no distant date that it will be possible to give further concessions to the public. It is not the intention to run the office for' the purpose of making big profits, and further reductions in rates may be looked for in the future, but when an office such as this takes on; large liabilities without any subscribed capital," reserves must bo built up against those liabilities before further, concessions can Tse granted. Saving built up those'necessary reserves, the question of what further concessions can be given will receive earnest consideration.

A SUCCESSFUL UNDERTAKING. They would see from the figures he Bad quoted, added the Minister, that the State fire insurance undertaking in this country had been very successful: and he was sure that the board had been a very great help to tho general manager; -He .want to say anything about the competition the department had to meet, or its future work; hut he thought that it would he ...recognised,. .it had been a great State undertaking, land there would be more such undertakings in the future. Tho success of the State .hire Office, lie--believed, -would lead to the State-engaging-in-further undertakings. (Applause.)

AIR MASSEY’S CONGRATULA-

TIONS,

The Prime Minister said that he was very glad to be present at the ceremony. It was an important ceremony, and he hoped that the building that would result would be on© worthy of the site, worthy of ' the-great State undertaking that was to be housed there, and worthy of the Dominion. (Applause.) The site had been purchased somo years ago, when money, as at present, was not very plentiful; and then the war came, and tho erection of, the building had to bo postponed. But he.wished to say that there had been no more restriction and delay in connection with the building than there would have been In connection with any private building of the kind. He congratulated the department and tho public upon the splendid work that had been done by tho department that was to be housed there. That work had certainly justified the undertaking, and as the department had grown in the past, so, he believed, it would continue to grow for many years, at ail events. Ho hoped that the building would not bo delayed unnecessarily, though ho knew that in the case of such buildings there had been serious delay, because it was impossible to get the needed material from Britain. Even now the establishments at Homo had not been able to roach the same output as before tho war, and they would not bo able to reach it for some time to'come. THE SURPLUS PROFITS.

The Hon. G. W. Russell stated that aa one who had been for a short time Minister in charge of tho State Fire Office, he joined in congratulating the Ministe ron the laying of the founda-tion-stone of tho fine building to bo erected there. (Applause.) It was to bo noted that it would be built out of tho profits that Had’been made out of the State Fire ‘ Office. He congratulated the Minister add Mr Robieson on the magnificent financial results of having created reserves of over £300,000 but of profits; but in connection with the Government Bite Insurance Office there was a system under which .the department did not secure the whole, of . the, profits, but handed back a, considerable share to insurers. (Applause.) He liked to sneak plainly, and suggested that, now the. Fire Insurance Department bad got that fine building out of the reserves, it should consider handing back to the insurers a substantial part of the profits. (Applause.) That would bo a great concession, and would do what the State Fire Office-was originally intended to do—lower the cost of fire insurance throughout tho country. (Applause.)

REFUND FORESHADOWED. With regard to refunding any excess profits, said Mr MacDonald, when they were in a position to do that the Act provided for its being done. (Applause.; He had had some remarks written down under that head but, as many insurance gentlemen were present, ho thought ho would cut them out. iLoua laughter.) When the proper time came he would notify the public properly. (Applause.) He hoped that the State Firo Insurance 'Dopavtmciu would go on growing and increasing without unduly interfering with any undertaking in any way. 'Applause.) The Minister paid a high tribute to

Mr Ilobieson, tho general manager. There had never, ho stated, been a more zealous officer in a public department. Mr Hobieson had worked hKe a Trojan under groat difficulties. On Die call of the Minister, three hearty cheers were given tor -Mr Ilobieson, and the procedings closed with the National Anthem,