8. What occupations are taxed in the United States?

9. What is an income tax? Does there exist a federal income tax in the United States? What income is taxed? What is a progressive

income tax? What is a permanent income? A temporary income? Should both be taxed equally?

10. What is an inheritance tax?

II. How are taxes on corporations estimated? Explain the federal corporation tax as it exists in the United States.

12. What are internal revenue taxes? Who pay them? What difficulty is presented in internal revenue taxes? What articles are taxed in the United States for internal revenue?

13. What are export duties? Import duties? Why should excessive import duties not be levied on the necessaries of life?

14. What are stamp taxes?

15. What is meant by incidence of taxes? Shifting of taxes? Illustrate the shifting of a tax. What taxes are shifted? What taxes cannot be shifted?

16. Are indirect taxes better than direct taxes?

17. Give briefly the principles affecting taxation. Explain each one.

18. What is meant by equality of taxation? What is meant by saying that taxes should be certain ?

19. How can taxes prove uneconomical?

20. How are government loans made? When are government loans justifiable?

21. What is a floating debt? A funded debt? A refunded debt?

CHAPTER XIX

INSURANCE

Definition. Insurance is a contract by which one party, the underwriter or insurer, agrees, for a consideration, to make good a loss sustained by another party.

History. Although modern insurance was quite unknown in past times, yet there are traces of insurance of some sort as far back as the Middle Ages. Probably the first indication of it may be found in the loans in bottomry, which appear in the thirteenth century.

Bottomry loans resembled a wager. The owner of a ship about to set out to sea wagered with a money lender that his ship would be lost on the voyage. The amount of the wager was a definite sum of money, which was advanced to the shipowner. If the ship was lost, the money lender was out the amount of the wager. If the ship returned, the money lender won the wager and received the amount advanced together with interest.

The principle of insurance was carried into practice in Italy in the beginning of the fourteenth century. In the books of Del Bene e C'i are found the costs of insurance in sea and land transportation for the years 1318–1320. The oldest official document pertaining to insurance is dated April 22, 1329. (Huppert, Versicherungswesen," in Staats Lexicon.)

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A species of insurance or help extended to the sick and the aged prevailed among the guilds of the Middle Ages. (Journal of Political Economy, Sept., 1903, pp. 589, 590. Cf. Frankel and Dawson, Workingmen's Insurance in Europe, p. 169. Cf. E. Levasseur, Histoire des classes ouvrières et de l'industrie en France avant 1789.)

Record of payment of indemnity for losses by fire may also be found among the guilds. (International Encyclopedia, "Fire Insurance.")

Evidence exists of the practice of insurance in Genoa in the fourteenth and fifteenth centuries. The first Mutual Insurance Company is found in Portugal, in 1383. (Huppert, "Versicherungswesen," in Staats Lexicon.)

Stock companies began in the seventeenth century. (Huppert, Ib.)

Before the beginning of the eighteenth century, Italy, Spain, Portugal, and the Netherlands carried on insurance against risks at sea. After that time, there sprang up in England numerous companies insuring against transport risks. (Huppert, Ib.)

Traces of life insurance may be found in the fifteenth century (Huppert, Ib.), but it developed principally in the eighteenth and nineteenth centuries. In America, it appears for the first time in 1759, in Philadelphia, in the form of the Presbyterian Annuity and Life Insurance Company. In Massachusetts, it makes its appearance in 1812 as the Massachusetts Life Insurance Company. (Intern. Encycl.) In 1830, the New York Life and Trust Company, and in 1842, the Mutual Life Insurance Company were organized in New York.

Fire insurance appeared in England in the seventeenth century. It gradually spread over the whole world during the eighteenth and nineteenth centuries.

Present Extent of Insurance Business. - The business of insurance has advanced rapidly and extensively, so that to-day the amount of money invested in insurance of various kinds runs into the billions of dollars.

In 1912, Jan. 1, the assets of American Life Insurance Companies, not including Industrial Companies, reached $4,164,491,688; the policies in force, 32,401,762 in number, and $18,002,780,439 in amount. (Cf. Insurance Yearbook, 1912, p. 489.)

The following tables will help to show the extent of insurance business:

II. LIFE INSURANCE IN FORCE IN VARIOUS COUNTRIES, 1912

III. FIRE AND MARINE INSURANCE COMPANIES IN U. S., 1912

IV. GROSS ASSETS OF FOREMOST AMERICAN FIRE INSURANCE COMPANIES,

(Standard Fire Insurance Tables, 1912.)

Over eighty companies doing fire insurance business in the United States had assets of over one million dollars in 1912.

V. CASUALTY INSURANCE IN THE UNITED STATES, 1912. PREMIUMS

Nature and Advantages. The special economic importance of insurance is found in the fact that it reduces the aggregate social cost of providing against the risks from personal accident, fire, shipwreck, and other calamities to which the members of society are exposed in the course of business.

All men run a certain amount of risk, and the more engaged one becomes in the various activities of life, the greater number of risks does one run. The uncertainty of the time of death or bodily accident faces all men. The business man is exposed to dangers necessarily connected with his business-fire, explosions, earthquake, shipwreck, strikes, dishonesty of employees, etc.

Every prudent man engaged in business must take account of the risks he incurs and must insure himself against the many uncertain losses to which he is exposed. He must set aside