730   BEST'S INSURANCE REPORTS—F11:E _1_CI) _\1ARINE.

RECIPROCAL EXCHANGE — Continued.

the subscribers by whom paid, and each subscriber par
ticipates in losses in the proportion that his premium de-
posit bears to the aggregate premium deposits participating.

The compensation of the attorney and manager is 25%
of the premium deposits of members. This compensation
covers all expenses, except taxes, legal expenses and ex
penses of Advisory Committee.

The liability of members or subscribers to this exchange
for funds for excess losses and claims over and above the
actual resources of the exchange is reinsured by a stock
company.

The fluids of this exchange are invested in high-class
securities.

Attention is called to the fact that no reserve was set up
in the statement below for unearned premium liability.

Its statement as of December 31. 1919, is as follows:
Admitted cash assets: Real estate mortgages, $15,000;
bonds and stocks owned (market value), $400,824.53; Bash
in banks. $390,852.01; net deposits in course of collection,
$32.207.85; total cash assets, $838,074 39.

Liabilities: Losses in process of adjustment, $8.000:
total liabilities, $8.000; net cash surplus, $830.974.39; total.
$838,974.39.

Business front Organisation.—Receipts: Net deposits
credited to subscribers, $4,555,196.76; net interest, less
taxes, Advisory Committee and legal expenses, $73.929.92;
guarantee fund, $478.,405; total receipts, $5.107.531.68.

Disbursements: Losses paid, $2,108,498.60; losses in
process of adjustment. $8,000; savings return in cash to
policyholders. $1,681.653.69; total disbursements. $3,798,-
152.29.

Surplus, reserve and guarantee fund, $1,309.379.39.

In connection with this report. see important article in
troducing this section.

RECIPROCAL INSURANCE BUREAU,

Chicago, Ill.

furnish us figures showing the financial condition of the
separate groups.

The savings to subscribers are credited according to the
class to which they belong.

Since organization this exchange, as a whole, has shown
an average yearly saving in excess of 40%.

Maaayenment and Rep(itation.—Bruce Dodson is attorney
in-fact and manager of this exchange. He has associated
with hint, as assistant managers, E. G. Rowley, E. R.
Rankin, Bruce Dodson, Jr., J. W. Carense and Ralph
Dodson.

Bruce Dodson operates also the Casualty Reciprocal Ex-
change and controls the Equity Fire Insurance Company,
of Kansas City, Mo., which was established by him early in
1919, and which has been very successful. The affairs of
the exchange are under the supervision of an Advisory
'Committee consisting of fourteen members.

The Reciprocal Underwriting Company, which is owned
jointly by Bruce Dodson and the policyholders in his ex-
change is the substitute attorney, becoming active upon the
death of Mr. Dodson. It was established in 1912 to assure
continuity of management and to make the office co-opera
tive by the distribution of any savings arising from the
expense of management. The authorized capital of the
company is $500,000, divided into $250,000 common and
$250,000 preferred stock.

Ilan of Operation.—Breweries, ice and ice cream manu
facturing plants, laundries, bakeries, milk products and
newspaper publishers are insured. The largest amount
written on a single risk is $125,000, which is reinsured
down to $100,000. The proportion of liability assumed by
each subscriber is determined by a premium deposit, which
the manager states is equal to the regular tariff rate. The
premium deposits are credited to the respective accounts of

History.— This i,s a reciprocal insurance exchange which
was organized in 1912 at St. Louis, Missouri.

On June 1, 1918, the offices were removed to Chicago.
Illinois, and the exchange obtained a license from the
Illinois Insurance Department.

It was originally composed of two groups known as the
"Manufacturers of Clay Products" and "Metal Trades"
at Reciprocal Insurance Bureau.

Prior to 1916 each group was operated as a separate ex-
change: They were then merged, the accounts of each
group being kept separate, each being charged with its
own losses and credited with income and savings.

The Clay Products exchange was established in Decem
ber, 1912, and the Metal Trades exchange in April, 1915.
The issuance of Metal Trades policies has been discontinued
but the exchange still has a special class of members known
as "Manufacturers of Clay Products at Reciprocal In
surance Bureau."

Management.— Prior to 1918, Campbell & Eckel were
the attorneys and managers with offices in St. Louis. They
were succeeded by Parham, Going & Campbell, another
partnership.

On April 2, 1919, the management informed us that
within a few days the management of this exchange and

of the Federal Reciprocal Underwriters, of Memphis,
which, however, operates from the same office as this ex-
change in Chicago. would be transferred to Parham, Going
& Co., Inc., an Illinois corporation, with $50,000 capitali
zation, later to be increq,sed to $100,000. and of which
John L. Parham was president and James W. Going seere•
tary and manager. Early in 1920 Mr. Going sold his in
terest in the incorporated attorney-in-fact to J. II. Hines,
president of the J. H. Hines Lumber Company. Memphis,
Tenn., and severed his connection with this exchange. We
were informed in May, 1920, that the attorney-in-fact is
operating under the title Parham, Hines & Co., and that
this concern recently was given the management of the
National Lumber Mutual Insurance Company, Chicago, Ill.
(See report elsewhere herein.) The Federal Reciprocal
Underwriters is also managed by this attorney-in-fact.

Plan of Operation.— A signed memorandum furnished to
us by the management in March, 1919, shows that the plan
of operation is, in almost all respects,' similar to that of
the Federal Reciprocal Underwriters, reported upon else-
where herein, and which is under the same management

In this exchange, however, a reinsurance arrangement
has been made, which, the management claims, relieves the
members of liability to assessment.