r
usage, or sell the goods thus entrusted to him for sale to himself.
See _Agency_.

=Fire Insurance.=--Insurance against loss by fire is now effected in
companies organized for that purpose. Two kinds exist, stock and
mutual. In mutual companies the persons insured act together to insure
each other. The members of some of the largest mutual companies are
manufacturing corporations. The more general mode of conducting them
is to require each member to pay a premium in advance for the amount
insured which, unless unusual losses occur, will be enough to pay all
the losses for the year. If it is not all needed, the balance is
returned to the parties who paid the premiums, or is credited to them
for the following year. If the losses exceed the premiums thus paid in
advance, then an assessment is made on each member to cover the
deficiency. Generally the premium paid is more than enough to cover
the losses, and a balance is returned or credited to the insured as
above mentioned. As mutual companies do not take such risks as stock
companies, the cost of insurance is less and therefore is carried in
preference to insurance in stock companies, whenever it can be
obtained.

There is another way for paying for losses in mutual companies.
Instead of paying cash premiums in advance, the insured gives a bond
or note well secured that he will pay in cash whenever a call is made
on him to cover the losses that have been incurred at the end of the
year or other period. This method is in vogue in some sections,
because still less money is required to keep property insured. Of
course besides the money to pay losses another sum is required to pay
the expense of management. It will be seen that the mutual plan is
purely for protection against loss and no profit in the way of
dividends is forthcoming, for the companies have no capital. It is
true that some companies, instead of returning the unexpended premiums
for losses retain them or a part of them and by so doing accumulate a
surplus. Many companies, however, return all the contributions not
expended for management or losses and have no surplus, or only a very
small one.

Stock insurance companies proceed on a different principle. They are
organized to make money, a capital is subscribed, the rates of
insurance or premiums are fixed and after paying the expense of
management and loss, the balance is paid to the stockholders in the
way of dividends. The business is one of unusual