CHAPTER III.. Insurance in General.

INSURANCE IN GENERAL.

SECTION CCXXXVII.

INSURANCE IN GENERAL.

The idea of societies for mutual assistance intended to divide the loss caused by destructive accidents which one person would not be able to recover from among a great many is very ancient. The insurance of their members against causes of impoverishment was one of the principal elements[237-1] of the strength of the medieval communities (Gemeinden und Körperschaften.) If we compare these insurance institutions of the middle ages with those of the present, we discover the well-known difference between a corporation and an association. There the members stand to one another in the relation of persons who, therefore, seek to guaranty their entire life in the one combination; here, they appear only as the representatives of limited portions of capital confronted with a definite risk, the average of which may be accurately determined. Hence, the former are of small extent, mostly local; the latter may extend over whole continents, and even over the whole earth. The former have uniformly equal members; the latter embrace men of the most different classes. While the former, therefore, simply govern themselves, often only on the occasion of their festive gatherings, the latter need a precise charter, an artificial tariff and a board of officers.

As the absolute monarchical police-state constitutes, generally, the bridge between the middle ages and modern times, so too the transition from the medieval to the modern system of insurance has been frequently introduced by state insurance.[237-2] [237-3] This was very natural at a time when the guilds of the middle ages had lost their importance, and private industry was not ripe enough to supply the void left by them. The government of a country, far in advance intellectually of the majority of its subjects, may, by force, induce them to participate in the beneficent effects of insurance, and immediately provide institutions extensive enough to guaranty real safety. While it may be called a rule that mature private industry satisfies wants more rapidly, in greater variety, and more cheaply than state industry; in the case of insurance against accidents, especially of insurance against fire, there are many peculiarities found which would make the entire cessation of the immediate action of the state in this sphere, or its limitation simply to a legislative and police supervision of insurance, seem a misfortune. A dwelling is one of the most universal and urgent of wants, and indeed a governing one in all the rest of the arrangements of life. If it be destroyed, it is especially difficult to find a substitute for it, or to restore it. And to the poorest class of those who need insurance, private insurance will, perhaps, be never properly accessible.[237-4] If German fire insurance and the German system of fire prevention be so superior to the English and North American, etc., one of the principal causes is that German governmental institutions so powerfully participate in it.[237-5]