STATE FIRE INSURANCE BILL.

Wanganui Chronicle, 30 July 1901, Page 2

STATE FIRE INSURANCE BILL.

A GONFISCATORY MEASURE,

The Sydney "Daily Telegraph" of the 12th insjant, in commenting upon the State Fire Insurance Bill, says : —The New Zealand Government has for some years had the intention of adding State n're insurance to its many avocations, and the requisite Bill has now been introduced. An Insurance Board is to, be established, and a capital of £250,000 is provided for, with as much more as may be necessary. Compulsory lire insurance is vlie point aimed at, and the payment of the requisite premiums in the form of rates. The difficulty will naturally be to determine the amount of the policy which each insurer shall be compelled to take out. At present any man can determine what he will insure for; bivj the principle of compulsory insurance must involve the right *of the State to tell him what his insurance shall amount to. If New Zealanders were an uninsured people such a department established by the State would call for much commendation, in spite of the difficulties atftached to it, and the doubt which would arise whether the good risks would not be compelled to contribute heavily towards the insurance of the bad ones. But in New Zealand there has been long established some important fire insurance companies, in addition to the extensive business conducted by the external companies. The British fire offices, too, play a very important part in fire insurance. Take such a fire as that at Hordern's. The local companies dare not insure amongst them a risk to the extent of £400,000. Such losses as that at Hordern's and the latte fire at the Melbourne soft-goods warehouses would have shut them up. These great risks must be spread. But either the State intends to supplant the local business conducted by these numerous offices (which is confiscation), or it intends to supplement them, in which case iihe I companies are likely to attract all the non-hazardous business; while the State will be saddled with the extreme risks. In | the one case, after permitting the investment of capital, the State would set to Work to annihilate it; in the other the Government would be saddled with the undesirable class of business, either individual risks too onerous for the companies to face, or risks they fight shy of for obvious reasons. But the 'New Zealand Government is too "progresive" to under,lake the latter class of business. We may bo certain that its intention is to supplant the existing companies, either forcibly, or by severe competition, with the funds of the State at is back, by rendering their operations uniprofiifable. That affords another forcible illustration of the insecurity of private capital at the present time. The difficulty of employing capital to advantage i« throughout Australasia one of the problems we have to face. Capital is, or is thought to be, increasingly insecure. One prominent M.L.C. recently said: "I bare beien asked the question whether ! there is an opening for the employment of capital here. I do not know of one that affords a reasonable element of security with a fair iprospeet of remuneration." All : this advanced legislation, with «• view to harassing business and securing the labour vote, is seriously damaging the investment of capital and diminishing the employment of labour. If the State could-pos-sibly supplant the private capitalist and the joint stock company the position might; ba different. But that is hopeless. The entire resources and borrowing ca.pacity of the Governments can be but a drop in the ocean. They may tackle the fire insurance companies, formerly encouraged, and wipe them out. They may, perhaps, worry the shipping companies out of existence, and start State shipping, as the New Zealand Government also proposes to do. But they will not add one atom to the employment of the Australian workmen ; and the only effect will be to check production, which has to find the funds necessary for I paying Government rates of wages to a comparatively few additional State employees. .Australia has undoubtedly been lagging behind —in the world-wide race towards advancement in recent' years, and tlra insecurity of capital is one of the main reasons why it has done so. .