Mr. RUTLEDGE. Further, I would say that so far as Iowa is concerned and at this time I am talking entirely of Iowa-the hail loss to farm crops, if experience means anything I will admit it has to be estimated-is approximately 20 and not more than 25 percent of the damage that is caused to the crops by things to be covered under your bill. That, however, would not include these excessive drought years. That is a catastrophe that you cannot consider. But I am talking of the normal conditions. Senator POPE. It would be your idea that in Iowa the hail would be about one-fourth of the loss from general natural hazards? Mr. RUTLEDGE. Yes, sir. In Indiana, Illinois, and Missouri, the loss would run about 25 percent less than the Iowa record. In Minnesota it varies a great deal in various parts of the State. It varies to the extent of as low as 11⁄2 percent up to 7 percent. And the DakotasSenator Frazier, you probably know something about that our record and information is that it varies from about 21⁄2 percent to 10 percent in the extreme worst parts. In Nebraska it will range from 1 percent in the extreme southeast corner to as high as 14 percent in not quite the extreme west—there is a little worse place than the extreme west in Nebraska. In Kansas the record would be about the same as Nebraska. That would be a slight variation. When you get into Colorado it would run on an average over the State of Colorado up into the 12-percent division. own Senator POPE. What States are covered by your operations? Mr. RUTLEDGE. Our own operations are in Iowa, Nebraska, Minnesota, and we did operate in South Dakota, but had to give it up, Wisconsin, Missouri, Illinois, and Indiana. Those are our operations. That is the general information concerning the hail loss ratio as compared with Iowa, as Iowa is the basis for all of those States I have mentioned. You are welcome to that if it is of any particular value. I can also furnish you with a tabulation here. This is made by the stock insurance companies in Nebraska. This is their own record. The record here that I have is for the years 1915 to 1933, inclusive, and they show the loss ratio as being between a low of 1% or 1 percentthis is the actual experience under an insurance program, it would not include all the people, you see-to a high of 16.58 percent. That is their own tabulated record. You are welcome to that. Now, so far as statistics on hail losses are concerned, I rather think, unless you have some questions, that would include the statistics. I have said that the loss in Iowa from hail is approximately onefourth of the loss from all causes to be covered under your bill. That would have to be corrected in some instances in other States. It would run proportionately more in some other State and proportionately less. The hail, for instance, as you move into the western part of Nebraska and Colorado and into Colorado and into Kansas, western Kansas, would be the greater percent of your total loss, except for your catastrophic drought that is an unknown quantity. Senator POPE. I think it would be well to have this table included in the record. This is the record of the private insurance companies, stock companies that write hail insurance. Mr. RUTLEDGE. Yes, sir. (The paper referred to follows:) Hail liability and loss, 1915–33, inclusive, of all fire insurance companies writing hail insurance in Nebraska Hail liability and loss, 1915-33, inclusive, of all fire insurance companies writing hail insurance in Nebraska-Continued Senator POPE. Now, with reference to the sheet you handed me containing figures, did you include all of these figures in your testimony? Mr. RUTLEDGE. I did, sir. That is not the same kind of a record, you understand. It is not a tabulated record. It is not exactly a conclusion but it is a fair determination from experience. Senator POPE. I think it will be unnecessary to make further use of this, then, if the figures are already in the record. Mr. RUTLEDGE. Now, Mr. Chairman, I have just read the bill this morning. This is the first time I have seen it, and as I have said, the mutual insurance industry feels that they can offer no objection to the bill. They want to cooperate with the Government. I do notice in this bill one or two things, however, that from experience I would like to suggest maybe there should be some change made. Senator POPE. We will be very glad to have any suggestions you care to make. Mr. RUTLEDGE. I think I realize, probably, the purpose of the particular section 4-A, and respect the purpose; however, it seems to me that in this board of directors, if it is left three men from the Agriculture. Department, that it would be beneficial to the corporation to enlarge the committee to five, or at least four, and add to it one man representing the insured, that is, the farmer group. It may be advisable to add to it a man representing, from the experience standpoint, the insurance phase of it. That is just a suggestion. I am not trying to say that it should be done, but it seems to me that it might be to the advantage of the corporation to have, either as part time, not necessarily the whole time, but as a part-time committee, someone from those two divisions. There may be still a third one that I don't happen to think of. Senator POPE. Are you familiar with the provision in the bill providing an advisory committee? Mr. RUTLEDGE. I understood that. That might take care of the situation, but as I read it I did not conclude that might cover it if it is found advisable. Senator FRAZIER. This section 4 provides that the three persons shall be employed in the Department of Agriculture. Mr. RUTLEDGE. Yes. Senator FRAZIER. Don't you take it that the people employed in the Department of Agriculture represent the farmers? Mr. RUTLEDGE. Yes, sir. Don't misunderstand me. I think Mr. Green and Mr. Rowe understand me fairly well. They would not misinterpret it. They represent the Agricultural Department here, but it just seems to me that the knowledge and the advice that naturally would come to those men that are active in that particular industry, a dirt farmer, might have some theory or suggestion that might prove to the advantage of the other three men. Senator POPE. I think that is an interesting thought. Senator POPE. Of course, a local committee, who are made up of farmers in the various sections of the country, will be connected with it and its administration, and we would expect to get the benefit of any advice or suggestions that they would have. The Board would undoubtedly have the benefit of this advice. Mr. RUTLEDGE. Now then in section 7 [reading]: The Board may condition the issuance of such insurance in any county or area upon a minimum amount of participation in a program of crop insurance formulated pursuant to this act. I interpret that that it is not their intention to furnish this class of insurance in any particular area, or possibly county, unless a certain number will participate. Now, I am thinking at this particular moment of my own reaction among the farmers to a plan that requires a certain number to cooperate. There has been a very bad reaction at times to things of that nature. It may be all right for this, but it just comes to me as I run through this that there is a possibility that that would work adversely to the success, and rather that any individual could participate whether others did or not, which might be a more satisfactory idea. I realize that the purpose of that is that the maintenance of whatever local committee is necessary and so forth and so on, would not be too great a burden in proportion to the volume that might come from that particular territory. I think that that is the purpose of it, but still it can work very adversely if our experience with human nature acts in this as it does in our own business. Now, in (b) of that same section, "Such premiums shall be collected at such time or times, in such manner, and upon such security as the Board may determine." Now, that may not mean what I have in mind, but there is this about this thing: If experience means anything—and I have talked with both the old line people and the mutual people about it-it has been our opinion, and I think we expressed the same thing at the time of the President's committee meeting, that this proposition should be completed as an annual transaction; that is, the premiums should all be collected each year and they should be likewise the losses should be paid each year, completed. Each year should be a complete year by itself. That may take care of that, but it just didn't read to me as though it was a feasible plan to do that, and I know that there was at one time a suggestion that there might be some way to carry over the premiums to another year. Well, I think you are placing a man in a rather extra-burdensome position if you do that. That has been our experience. That is all I care to say about the bill itself. There are one or two other things that I might offer. As I understand it, the thought is to write this insurance in a short period between the sowing time and |