History of Alabama and dictionary of Alabama biography, Volume II, Part 13

Author: Owen, Thomas McAdory, 1866-1920; Owen, Marie (Bankhead) Mrs. 1869-
Publication date: 1921
Publisher: Chicago, The S. J. Clarke publishing company
Number of Pages: 724

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In the miscellaneous group are to be in- cluded the Canebrake Experiment Station, at Uniontown, and the Alabama State Bar Asso- ciation. The work of the experiment station is articulated with the office of commis- sioner of agriculture and industries, and also with the Alabama Polytechnic Institute. The commissioner of agriculture and the director of the experiment station of the Alabama Polytechnic Institute are members of its board of control. The State Bar Associa- tion, while a voluntary professional and edu- cational institution, is nevertheless related to the State officially, in that it is given authority to institute and prosecute or cause to be instituted and prosecuted in the name of the State, proceedings for the removal or disbarment of attorneys .- Code of Ala., secs. 54-58; Acts of Ala., 1911, p. 242; and Gen- eral Acts, 1915, p. 201. For Bar Associa- tion, see Code, 1907, sec. 2995.

The penitentiary is sometimes referred to as a penal institution. While this is true in its larger sense, for purposes of admin- istration, it is not so regarded. The peni- tentiary, together with all of the business connected with the administration and man- agement by the State of criminals after con- viction, is under the management and control of a board of convict inspectors, which con- stitutes a branch of the executive department of the State.

Authority is given the trustees of the Ala- bama Polytechnic Institute to "establish and maintain an agricultural experiment station at which careful experiments in scientific agriculture may be made." This has been established and is conducted in conjunction with the Alabama Polytechnic Institute.

Agricultural experiment stations and schools are established by the Code of 1907, p. 59.

Experiment station work conducted by these schools is regarded generally as a part of their educational activities. It has been

the custom to print a bulletin each year, descriptive of the work conducted by them as an experiment station.

State institutions are either organized un- der constitutional requirement or by statute.

Those named in the constitution of 1901 are the University of Alabama, the Alabama Polytechnic Institute, the Alabama Girls' Technical Institute, and the Alabama School for the Deaf and Blind.

Sec. 267 provides that the legislature shall not have power to change the location of the State University or of the Alabama Poly- technic Institute, or of the Alabama School for the Deaf and Blind, or of the Alabama Girls' Technical Institute "as now established by law, except upon a vote of two-thirds of the legislature taken by yeas and nays and entered upon the journals." Sec. 264 of the constitution provides that the University of Alabama shall be under the management and control of a board of trustees, to consist of two members from the congressional district in which the University is located, and one from each of the other congressional dis- tricts, and the superintendent of education and the governor are ex-officio members of the board and the governor is ex-officio presi- dent. The members of the board elect their own successors. Sec. 265 of the constitution of 1901 requires that after the ratification of the constitution, there shall be paid out of the treasury of the State the sum of not less than $36,000 annually "as interest on the funds of the University of Alabama, hereto- fore kept covered into the treasury, for the maintenance and support of said institution," but the proviso is made that the legislature shall have power at any time it may deem proper for the best interest of the University to abolish the military system at the institu- tion then in existence, or reduce the said sys- tem to a department of instruction, and that such action on the part of the legislature shall not cause any diminution of the amount of annual interest payable out of the treas- ury for the support and maintenance of said university. The military was abolished in 1903. See Acts, 1903, p. 115.

By sec. 266, the Alabama Polytechnic In- stitute is placed under the management and control of a board of trustees, to consist of two members from the congressional dis- trict in which the institution is located, and one from each of the other congressional districts of the State, the state superintend- ent and the governor, the latter ex-officio president of the board.

All of the institutions above referred to are under governing boards, known either as boards of trustees or boards of control, or boards of managers or directors.

With the exception of the Confederate Soldiers' Home, the Canebrake Experiment Station, the State Bar Association, the Epi- leptic Colony, and the three negro normal schools, the governor is ex-officio president or chairman of the several boards.

The state superintendent of education is ex officio a member of all educational insti-

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tutions, with the exception of the three nor- mal schools for negroes.

The State has no ex-officio relation to the State Bar Association.

The attorney general is ex-officio a member of the boards of the Alabama Industrial School for White Boys, the Mercy Home In- dustrial School for White Girls, and of the State Training School for Girls.

The commissioner of agriculture and in- dustries is ex-officio a member of the board of control of the district agricultural schools and experiment stations, the Alabama In- dustrial School for White Boys, and the Cane- brake Agricultural Experiment Station.

The state health officer is ex-officio a mem- ber of the board of control of the Alabama Sanitorium for Consumption and Tubercu- losis, and of the board of commissioners of the Alabama Epileptic Colony.

All of these institutions receive state sup- port with the exception of the Alabama State Bar Association.

All are wholly dependent upon state sup- port with the exception of the Mercy Home Industrial School for White Girls, and the Tuskegee Normal and Industrial Institute. The former is under the patronage of the Mercy Home, a private philanthropic institu- tion of Birmingham. The latter bas large endowments, as well as annual gifts in large sums.

The Alabama Sanatorium for Consumption and Tuberculosis has not yet been erected. A site has been secured near Cullman, but nothing further has been done. The board of commissioners of the Epileptic Colony bas organized, but nothing has been done by way of carrying forward its activities or for opening an institution for inmates.

The oldest of the state institutions is the State University, which had its genesis in the enabling act, which provided a township of land as the basis for an endowment. The next oldest is the Bryce Hospital at Tusca- loosa. The Mt. Vernon Hospital, which is used for the negro insane, is located on the grounds and in the buildings' formerly the Mt. Vernon military reservation and barracks, donated or re-ceded to the State in 1895 by the federal government.

The Alabama Polytechnic Institute is the agency in the State through which the Fed- eral government extends aid in agricultural and industrial arts. It is the recipient of all monies which come to Alabama under the Hatch, Morrill, and Smitb-Lever acts.

Administration .- In the administration of State institutions, they are almost uniformly directed by individual or separate boards. One section obtains in the matter of the gov- ernment of the State normal schools and the agricultural schools and experiment stations. The former are under a board of eight mem- bers consisting of the governor, the super- intendent of education and six members ap- pointed by the governor "for the government, regulation and control of the several white normal schools of the State."-( Acts of Ala. 1911, p. 494.) The latter are under the con- trol of the boards of control, one for each

school, to be composed of the governor, the State superintendent of education, the com- missioner of agriculture and industries and two members to be appointed for the con- gressional district in which the particular school is located.

In 1868, by article II of the constitution adopted in that year, "The normal schools, and other educational institutions of this State shall be under the management of a board of education, consisting of a member of public constructions and two members for each congressional district." The governor was to be ex-officio a member of the board, but without vote. The superintendent of education was to be the president of the board and have a casting vote in case of a tie only. This board was also to serve as a board of regents of the State University. This was the first important effort at cen- terizing the administration of the education- al institutions of the State, but it was not a success, and broad as it was of reconstruction it was stricken down by the adoption of the constitution of 1875.

The modern method of administration as evidenced in many states by the creation of state boards of charity and correction, state board of regents, etc., have been revived by the creation of the board for administration for agricultural schools and normal schools as above.

There are no State institutions for feeble- minded, or inebriates.

See Mclaughlin and Hart, vol. 2, p. 185.

In practically all cases the governor names the members of the boards. None are elect- ed directly by the people. From time to time, through experience or other consideration, the first members of the board have been elected by the legislature. Some are self- perpetuating as with the University, the re- formatory at East Lake.

INSURANCE. Insurance and the business of insurance and all State laws relating there- to are administered by the insurance depart- ment (q. v.), which has jurisdiction over all corporations, companies, firms, and individ- uals doing any form of insurance, whether fire, life, benefit, accident, indemnity, fidelity, guaranty, employers' liability, casualty, piate glass, burglary, automobile, tornado or cyclone. Every life insurance company char- tered under the laws of Alabama must have at least $100,000 paid up capital; every such fire insurance company, except mutual com- panies chartered before the adoption of the present code, $100,000; all other domestic insurance companies, not less than $50,000. The law specifically forbids the declaration or payment of any dividend except from surplus profits. Mutual life insurance companies, that is, companies issuing life insurance upon the cooperative or assessment plan, may not do business in the State until at least 100 per- sons shall have subscribed in writing for in- surance to the aggregate amount of at least $250,000; nor may any such company be per- mitted to do business unless and until it com- plies with the law requiring the deposit of

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HISTORY OF ALABAMA

certain securities with the insurance depart- ment. Any insurance company which so de- sires may adopt the mutual plan.

Early Charters of Combination Insurance Companies .- The first company intended to transact insurance business as a part of its activities incorporated under Alabama laws, was the "Mobile Marine Railway and Insur- ance Company," January 13, 1827. From the organization of this company until about 1875, all domestic insurance companies were incorporated under special charters issued by the legislature, the same as other corpora- tions. Their rights, powers, and the restric- tions upon their activities usually were stip- ulated in more or less detail in the acts of in- corporation. The charter of the first company in the State prescribed among other things the number and the mode of electing direc- tors; defined their duties and powers; author- ized the adoption of by-laws; specified the class of insurance risks that should be taken; and fixed other minor regulations for the government of the company. Several of the early companies were empowered to transact other kinds of business as well as insurance. The one above mentioned was of this class. It was incorporated "for the purpose of erect- ing a marine iron railway, for the hauling up and repairing of vessels, steam boats and other water craft, and for transacting the business of marine, inland and general insurance." Some of the others were authorized to do min- ing, navigate steamboats, act as trust com- panies, etc.

Beginnings of Regulation .- Aside from the regulations included in the charters there were no laws applying specifically to insurance or insurance companies until 1860, when an act taxing foreign insurance companies, evi- dently for the purpose of preventing competi- tion with domestic companies, was passed. Under the code of 1852, the capital stock of insurance companies was taxed the same as that of other domestic corporations. In the penal code adopted January 9, 1841, and form- ing a part of the code of 1852, penalties were provided for attempting to defraud insurance companies by burning or otherwise destroying ships or vessels, or goods and property on the same, or any building, goods, wares, merchan- dise, or other property. These laws were in- tended not only to penalize crime, but also to protect insurance companies. The act of February 24, 1860, which first placed the regulation of insurance companies under the jurisdiction of an executive officer of the State, imposed a tax of 2 per cent on the gross amount of premiums collected in the State by a foreign insurance company, and in addition required of foreign companies tran- sacting business in the county of Mobile, the payment of $200 a year for the benefit of the Fire Department Association of Mobile, and $200 a year to the trustees of the Mobile Medical College. It was likewise required that $200 a year should be paid by each com- pany for establishing an agency in any other town where there was a fire company, for the benefit of such fire company. No such priv-

ilege taxes were required of domestic com- panies; and it appears, therefore, that foreign companies were subjected to these rather high charges mainly as a means of minimizing competition with Alabama companies. How- ever, this scale of taxation did not long re- main in effect, that part of the law being re- pealed by act of November 28, 1862. In 1867 an act was passed to permit married women to insure the lives of their husbands under specified conditions. In November, 1868, it was provided that persons thereafter apply- ing for charters under the corporation laws of the State should file their application with the secretary of state, by whom the charter would be issued instead of by special act of the legislature as theretofore. After the pas- sage of this act there were no more insurance companies chartered by the legislature.

Alabama Insurance Companies during the War .- During the first two years of the War there were several new insurance companies incorporated in the State, and quite a number of acts were passed to increase the powers and privileges of domestic companies so as to enable them to meet the unusual conditions. Acts of November 20 and December 11, 1862, made provision respectively for the absence of officers of insurance companies in the Con- federate Army, and for the investment of such companies' funds in Confederate secur- ities. Besides these, there were several acts authorizing increases in the capital stock of different companies, probably to enable them to assume the large amount of business can- celled by northern companies on account of the War.

Post Bellum Conditions .- While there were no insurance companies chartered by the leg- islature after 1868, yet there were several laws passed during the next 10 years which made provision for the adjustment of insur- ance companies' affairs, the reduction of their capital stock, and in some cases for their liquidation. An act of April 23, 1873, author- ized the consolidation of insurance companies with companies organized for the transaction of other kinds of business, under stiplated con- ditions. Provision was made by act of Feb- ruary 10, 1875, for winding up the affairs and the dissolution of private domestic corpora- tions, including insurance companies. During the latter part of the seventies, the mutual plan of insurance came into prominence, and an act of February 13, 1879, enabled Alabama companies to adopt or abandon that plan. On February 18, 1897, the supervision of all the insurance companies, both domestic and foreign, was vested in the office of the secre- tary of state.

Earliest Companies .- The first Alabama company organized for the purpose of issuing insurance as a part of its business was the Mobile Marine Railway & Insurance Co., or- ganized January 13, 1827. Because of the delay in launching the company, it was neces- sary to reissue the charter January 28, 1829. The company's authorized capital stock was $500,000, of which $100,000 must be paid in before it could commence business. The next

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HISTORY OF ALABAMA

company incorporated was the Merchants' In- surance Co., organized December 28, 1832, whose authorized capital stock was $200,000. The charter of this company ran until Decem- her 31, 1850. The Tuscumbia Rail Road In- surance Co. was incorporated January 17, 1834, and the Alabama Life Insurance & Trust Co., of Mobile, January 9, 1836. The latter company was one of the more prominent ones, and Its charter is typical of most of those issued previous to 1860.

It was incorporated for 20 years, with an authorized capital of $1,000,000. Its affairs were managed by a board of trustees, which was empowered "to make Insurance on lives and also against losses by fire and to take marine risks; to grant and purchase annuities; to make any other contracts involving the in- terests or use of money, and the duration of life; to receive moneys in trust, and to ac- cumulate the same at such rate of interest as may be obtained or agreed on, or to allow such interest thereon as may be agreed on; to accept and execute all such trusts of every description as may be committed to them . . . . ; to receive and hold lands under .

. general or special trusts or covenants, so far as the same may be taken in payment of their debts, or as security for loans of their capital or otherwise. . . The company was authorized to act as guardian or trustee of estates of infants, lunatics or other persons, upon appointment by a competent court; and it was required to pay not less than 4 per cent interest on sums over $100 received in trust or on deposit. There were 27 sections in the act of incorporation, in which most of the details of the insurance and trust business as at present carried on were provided for and regulated. The right to charter other insur- ance companies was expressly reserved to the legislature. The attitude of the lawmakers and the conception of the rights and proper functions of private corporations upon which these early charters were predicated are well illustrated by section 26 of this company's charter, which provided that, "this act shall not be construed to confer on the said com- pany any rights or power to make any con- tract, or to accept or exercise any trust what- ever, which it would not be lawful for any individual when not restrained by statute under the general rules of law, which are, or shall be in force, to make, accept or execute."

Statistics of Incorporation of Companies .- Up to 1868, between 75 and 80 insurance com- panies, including those which transacted other kinds of business along with insurance, were incorporated by the legislature. The spread of interest in the subject of insurance and the growth of the business in the State are exhibited by analysis of the statistics of do- mestic companies chartered in various years. There was one company chartered in 1827, one in 1832, one in 1834, three in 1836, two in 1837, three in 1840, one each in 1843 and 1845, four in 1848, one in 1849, two in 1850, one in 1851, four in 1852, four in 1854, nine in 1856, four in 1858, fourteen in 1860, six in 1861, two in 1863, five in 1866, and seven

panies organized in Mobile; 9 in Selma; 7 in Montgomery; 4 in Eufaula; 3 in Wetumpka; 2 in Florence; 2 in Tuscaloosa; 2 in Tuskegee; 1 each in Cahaba, Demopolis, Eutaw, Green- ville, Huntsville, Jacksonville, Lafayette, Liv- ingston, Opelika, Talladega, Troy, Tuscumbia, in 1867. There were 17, possibly more, com- Uniontown, and Woodville, and several others organized in different counties but not listed here. Many of these companies probably never actually did any business, nor even perfected their organizations; but just how many can not be ascertained because there was no pub- lic supervision of them, and consequently no available record of their history. Several of them were organized by men of wealth and prominence, and had, not only sufficient capital with which to do business, but also the confidence of the people, and enjoyed the prestige conferred by the integrity and wisdom of their directorates. There were sev- eral Increases in capitalization, and an occa- sional consolidation among these local enter- prises; and probably a reasonable proportion of their number did not long survive, but here again records are lacking. The scope of the undertakings of some of the companies is shown by an examination of the charter of the Marion Insurance & Trust Co., incorporated in 1860. This company was "invested with power and authority to make general insur- ance upon houses, stables, machinery, cotton, corn and other produce; upon lives and health, both of white persons and of slaves, upon stock of every description, upon vessels, boats, freights, money, goods, wares and merchan- dise, and any other species of property, against loss in any manner by fire, dangers of the sea, rivers or otherwise, at such rate of premium as such company may agree to, and to tran- sact all such matters as appertain to an in- surance company, and also . . . . to loan its money or funds, from whatever source re- ceived, at interest, to invest the same in real or personal securities, by discounting, and deal with the same in the purchase and sale of domestic and foreign exchange . . . . to receive in trust, or on deposit, all funds or moneys that may be offered to them, on inter- est or otherwise." The company was forbid- den to issue any certificates of deposits, notes, or other paper intended to circulate as money, and to deal in or use the funds of foreign banks.

Statistics, 1915 .- At the close of 1915 there were 15 insurance companies of various kinds organized under Alabama laws which were actively engaged in business. Of these, two do fire and marine insurance; four life insur- ance; one accident or casualty insurance; and eight are assessment and mutual aid associa- tions. One of the fire and marine companies began business in 1866, and the other in 1870. Their combined capital is $300,000; the total amount of insurance in force Decem- ber 31, 1915, $3,649,414. They have paid losses aggregating $775,014.59, and have re- ceived in premiums on insurance written since beginning business a total of $2,572,087.03.

The four life insurance companies were

Col. Albert J. Pickett

William R. Smith

William Garrett

Alexander B. Meek

Peter J. Hamilton

Matthew P. Blue

Dr. Dudley D. Saunders

Joel C. Du Bose

Prof. Henry S. Halbert

Rev. T. H. Ball

William G. Brown

Dr. Thomas M. Owen George M. Cruikshank

Willis Brewer

HISTORIANS

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HISTORY OF ALABAMA

organized in 1906, 1907, 1908, and 1913; their combined paid-in capital stock is $511,- 517.50; the combined amount of insurance in force December 31, 1915, $28,533,900.50; total in force in Alabama, $10,895,084.50.

The casualty company was organized in 1909 and commenced business in 1910. Its paid-in capital is $300,000.

The assessment or mutual aid associations have all been incorporated since 1897.

See Auditor, the State; Fires; Insurance, Department of; Insurance, Fraternal; Secre- tary of State.

REFERENCES .- Code. 1852, secs. 391, 3134-3137; 1867, secs. 1180-1191; 1907, secs. 4543-4610; General Acts, 1909, pp. 321-326; 1911, pp. 685- 689; 1915, pp. 505, 834-838; State Auditor, Re- port, Insurance Dept., 1870, pp. iv and ix, 1871, p. ix, 1872, p. ix; State Insurance Commissioner, Reports, 1897-1915; State Fire Marshal, Annual reports, 1910-1913; Mobile Marine Dock & Mu- tual Ins. Co. v. McMillan, 31 Ala., p. 711; Pied- mont & Arlington Life Ins. Co. v. Young, 58 Ala., p. 476; Alabama Gold Life Ins. Co. v. Mayes, 61 Ala., p. 163; Home Ins. Co. v. Adler, 71 Ala., p. 516; Alabama Gold Life Ins. Co. v. Johnston, 80 Ala., p. 467; Central City Ins. Co. v. Oates, 86 Ala., p. 558; Noble v. Mitchell, 100 Ala., p. 519; Moore v. McClure, 124 Ala., p. 120; Continental Ins. Co. v. Parkes, 142 Ala., p. 659; Rayford v. Faulk, 154 Ala., p. 291; State Life Ins. Co. v. Westcott et al, 166 Ala., p. 192; Mutual Life Ins. Co. v. Allen, Ibid, p. 159; Sheffield Oil Mill et al v. Pool et al, 169 Ala., p. 422.

INSURANCE, DEPARTMENT OF. A State executive department, created September 25, 1915. The act relieved the office of the secre- tary of state of all powers of regulation, and committed to the newly established depart- ment "the administration of all laws, now in force or, which may hereafter be enacted re- lating to insurance companies doing business in the State."

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History of Alabama and dictionary of Alabama biography, Volume II, Part 13

Author: Owen, Thomas McAdory, 1866-1920; Owen, Marie (Bankhead) Mrs. 1869- Publication date: 1921 Publisher: Chicago, The S. J. Clarke publishing company Number of Pages: 724

Author: Owen, Thomas McAdory, 1866-1920; Owen, Marie (Bankhead) Mrs. 1869-
Publication date: 1921
Publisher: Chicago, The S. J. Clarke publishing company
Number of Pages: 724