Baltimore Equitable Society collection

The Baltimore Equitable Society for Insuring Houses from Loss by Fire, Baltimore’s oldest corporation and the third oldest mutual fire insurance company in the country, was incorporated by an act of the Maryland Legislature in 1794. The Society was governed by a board of twelve directors and a treasurer, who served as the Society’s chief executive, all of whom were elected yearly by a general meeting of the members. The first Treasurer was Joseph Townsend (1756-1841), who occupied the office for all but one of the Society’s first forty-seven years of operation. Initially a one-man show, the Society employed a few clerks and surveyors as needed and, upon Townsend’s death in 1841, began to fill the executive offices of Treasurer and Secretary with two people instead of one. Although the 1920s saw the further extravagance of the formal addition of an assistant secretary and assistant treasurer, the Society continued to operate with minimal staff. This conservatism in human resources reflected the carefully circumscribed conditions of the Society’s operation. Its range extended only to Baltimore and its suburbs, and while in the early days, risks were considered on a case-by-case basis, greater experience and sophistication in risk management led the Society increasingly to limit its risks to masonry dwellings. The company’s original charter called for a system of deposits, contributions, and dividends. Upon joining, each member would pay a deposit based on the type of property insured and the desired amount of coverage, initially limited to two-thirds of the full value of the property. Losses by fire, rather than being paid out of the company’s surplus, were funded by the collection of contributions, with each member required to pay a certain percentage of his or her deposit. For members, the upside to this obligation was that the Society’s surplus was dedicated not to losses, but to dividends. Upon the expiration of a seven-year policy, each policyholder took home the original deposit plus a dividend of the company’s earnings proportional to the deposit. As early as the 1850s, the directors and members of the Baltimore Equitable Society began considering modifications to the seven-year plan, seeking to bolster the Society’s membership rolls, and consequently, its surplus, by offering more flexible and appealing schemes of insurance. In 1857, the Society added transient insurance, which allowed for terms of insurance of one, three, or five years and funded itself through the now widely-used system of premiums, rather than the idiosyncratic system of contributions and dividends. Shortly thereafter, the seven-year policy was abandoned entirely in favor of the more unusual perpetual plan. Under the perpetual plan, each member paid an initial deposit (for dwellings, usually about 2% of the amount of coverage effected) and was not subsequently liable for any further premiums. Upon cancellation, the full amount of the deposit was refunded, regardless of whether any claims had been made against the policy. Though contributions might still be levied if necessary, the members and directors foresaw being able to pay its losses out of the surplus fund, which proved to be the case. By the late nineteenth century, the introduction of the perpetual policy had achieved the desired effect of increasing the membership rolls and surplus of the Society. With this increased prosperity came one of the few moments of controversy in the Society’s history. In 1890, a group of policyholders, roused in part by the Society’s decision to increase the amount of deposit required for insurance of certain commercial risks, advocated an amendment to the charter providing for the payment of periodic dividends from the Society’s surplus. A committee of prominent members appointed by the board of directors to study the matter concluded that, Baltimore being due for a great fire, the surplus should be left alone. At the next general meeting, an overwhelming majority of policyholders voted to affirm the committee’s findings. Thirteen years later, the Baltimore Equitable Society made good on all of its losses incurred in the Fire of 1904. As the twentieth century progressed, the Society’s officers showed an increasing interest in the their organization’s historical significance. In the 1920s, the Society’s sixth Treasurer, George Corner, established up the Museum of Firefighting History on the upper floor of the Society’s offices, showcasing the Society’s history as well as that of mutual fire insurance and firefighting in general. In the following decade, Richard Hart of the Enoch Pratt Free Library was recruited to catalog the museum’s publication collection and to produce a history of the Society to celebrate its approaching sesquicentennial. While this project seems not to have come to fruition, the efforts of Hart and especially Assistant Secretary Amherst B. Hall to organize the Society’s records up to that point are evident throughout the collection.