Table 1
Number and Authorized Capital of Specially Chartered
US Insurers and Banks by State, 1790–1860
State
No.
Insurers
Insurers’ Capital
(mill. USD)
No.
Banks
Banks’ Capital
(mill. USD)
Alabama
56
$5.505
15
$6.970
Arkansas
5
$0.450
4
$2.225
Colorado
1
$0.050
0
$0.000
Connecticut
64
$4.470
76
$17.580
Delaware
10
$0.250
17
$3.445
District of Columbia
3
$0.777
0
$0.000
Florida
8
$5.150
24
$4.935
Georgia
31
$9.350
50
$19.375
Illinois
86
$4.510
7
$2.300
Indiana
43
$1.410
4
$0.180
4
$0.200
0
$0.000
Kansas
11
$2.100
4
$1.100
Kentucky
72
$11.050
80
$29.660
Louisiana
24
$7.700
14
$44.000
124
$2.235
165
$14.480
83
$12.230
54
$26.760
368
$31.013
272
$61.150
Michigan
12
$1.000
23
$4.300
Minnesota
3
$0.100
0
$0.000
Mississippi
22
$2.590
15
$4.500
Missouri
121
$7.525
5
$7.500
Nebraska
5
$0.125
5
$0.450
New Hampshire
47
$0.850
89
$4.890
New Jersey
79
$1.700
63
$9.820
New York
221
$40.450
101
$39.085
22
$0.970
27
$14.900
108
$8.410
49
$16.325
2
$0.000
0
$0.000
Pennsylvania
250
$23.785
113
$40.680
Rhode Island
60
$5.677
110
$11.005
South Carolina
20
$5.000
25
$17.200
Tennessee
18
$2.045
18
$16.085
Texas
17
$2.525
2
$6.000
Vermont
20
$0.565
58
$2.409
Virginia
66
$6.660
71
$14.850
Wisconsin
34
$4.470
4
$1.100
2,120
$212.897
1,564
$445.259
Iowa
Maine
Maryland
Massachusetts
North Carolina
Ohio
Oregon
Totals
46 Financial History | Spring/Summer 2011 | www.MoAF.org
commercial banks had more total capital
than insurance companies because almost
two in every five insurers were organized as
mutuals. In other words, they were owned
by their policyholders, not by stockholders, and hence had no equity capital in the
traditional sense. (They did retain some
profits in rainy day contingency funds, but
most evidence of the extent of those funds
has long since spoiled and been fed to the
dogs — so to speak.)
In the broadest sense, chicken and pork
are both sources of sustenance. Similarly,
banks and insurers are both financial
intermediaries. In other words, they link
savers to entrepreneurs via their balance
sheets, their assets and liabilities. Banks
loan their capitals, deposits and notes to
businesses, individuals and governments.
Insurers loan their capitals and premiums
to the same types of borrowers. Closer
inspection, however, reveals that chicken
and pork taste quite different and provide
somewhat different nutrients, like more
or less fat, depending on how they are cut
and prepared. The same goes for banks
and insurers.
On the asset side of the balance sheet,
antebellum banks invested most heavily in
short-term commercial paper like bills of
exchange and promissory notes. Insurers,
by contrast, tended to make longer-term
loans like mortgages. According to an
1827 estimate, some 80% of the assets of
insurance companies in New York were
invested in bonds and mortgages on real
estate. Insurers also lent v XH