# The Story of Life Insurance/Chapter V

The Equitable's progress under Tontine caused general consternation among its most conspicuous rivals. They immediately pointed out its injustices, but found themselves unable to stem the popular enthusiasm. Hyde had now obtained what all his rivals desired, but had not had the ingenuity to devise—an unlimited expense fund. While they used all their energies detailing Equitable iniquities and the advantages of old line life-insurance, Hyde complacently bought off many of their most effective agents and attracted millions of new business that, under ordinary circumstances, his rivals would have secured.
The Mutual and the New York Life, after fighting the innovation for three years, quietly capitulated. In 1870 the Mutual announced a "new application of the old idea of Tontine"; in 1871 the New York Life advertised a "Tontine Investment Policy." The Mutual adopted the idea somewhat shamefacedly, in deference to what it declared a genuine public sentiment; the New York Life more cheerfully. Indeed, the latter company found it as convenient an escape from embarassment as did the Equitable itself. Organized in 1841 as a purely mutual company, the New York Life, from the first, had been unfortunate in its management. For many years Pliny Freeman, a thoroughly unscrupulous and dishonest man, had held the chief control. The New York Life, in Freeman's days, paid its dividends, not in cash, but in scrip which bore interest and was subject to redemption at some unspecified date. Freeman acquired the habit of purchasing these scrip dividends on the quiet, at a discount; and then causing the company to cash them in. By other reckless and dishonest methods, he finally, about 1863, brought the company to the verge of insolvency. The trustees, after investigating his management, forced him to resign. Freeman promptly started the Globe Mutual, soon built up, by expensive agency methods, a flourishing company, and then promptly wrecked it.
    1↑ 'Report of John A. McCall, examiner in New York Insurance Department, on the condition of the Globe Mutual Life-Insurance Company (1877): "The results of this investigation conclusively show that, vested with the entire charge of the affairs of this company, as its officers have been, their trust has been wilfully and shamefully abused to their own pecuniary benefit, and to the great injury of the policy-holders,"
The trustees selected, as Freeman's successor in the active management, a young blue-eyed clerk in their financial department, whose after career proved one of the greatest tragedies of life-insurance history. Of the early life of William H. Beers little is definitely known. He came of severe Methodist stock, spent several years in the United States Navy, and entered the New York Life in 1851. Here, by virtue of his energy, mental alertness, and enthusiasm, he rapidly made his mark. He fashioned his life-insurance career largely on the model of Henry B. Hyde. He watched with admiration Hyde's success in the Equitable; and as soon as he gained control of the New York Life, imitated his methods. In many ways he resembled Hyde. He had all Hyde's capacity for work; all his devotion to the company which chiefly owed to him its success. Largely, too, he had all Hyde's audacity and recklessness. Like Hyde, he lived only in the present; he esteemed temporary success above stability; and thought more of new business, "bigness," than the interest of his insured. "It'll last as long as I do," he replied to a subordinate who once called his attention to the flimsy character of his South American business. He ruled the New York Life as despotically as Hyde ruled the Equitable, He had a trunk full of proxies discreetly secreted at his own city house. Once he filled three executive offices—actuary, secretary, and vice-president; and, at the same time, rode rough shod over the nominal president. He ignored not only his policy-holders, but his trustees. He called trustee meetings irregularly, and got together his finance committee only on particular occasions. He supervised the business in all its departments. He practically made all the investments; managed the agency force; and regulated the daily routine. Like Hyde, he depended entirely for the greatness of his company upon the persuasive agent. He engaged anyone who could get business, irrespective of character or standing; he advanced hundreds of thousands of policy-holders' money to defaulters and notorious gamblers. Brusque and distant with most men, he would pet and fawn upon the successful producer. When John I. D. Bristol, the well-known Northwestern New York manager, demonstrated his capacity in the early '80's, Beers pursued him day and night. "Come, Bristol, with me," he said, throwing his arm around his neck, "and I'll make a millionaire of you." Beers's particular darling was George W. Perkins. He took him as a raw lad, educated him in life-insurance methods, and ultimately transformed him into what, he frequently declared, was the "greatest wonder in the business." He showed no mercy to the unsuccessful man. "What's an agent?" he once declared; "a lemon to be squeezed and thrown away after you have exhausted him." Beers's craze for new business amounted almost to a disease. To it he ultimately sacrificed himself. His enemies, in 1891, by pointing out his extravagant management, accomplished his destruction. His personal honesty was attacked at the same time, but on this point the evidence was inconclusive. At least he did not die rich.
Beers, a slavish imitator of Hyde's methods, adopted the Tontine idea with enthusiasm. He found in it the same advantages; a method of concealing unfavorable results to policy-holders, and a big expense fund for the purchase of new business. He adopted Hyde's estimate books, and the whole campaign of misrepresentation. He even went to greater extremes; promised policy-holders bigger "investment returns." He clearly outdid Hyde in his advertising methods. He added the bass drum and the cymbals to the life-insurance agents' equipment. He boomed the New York Life in all the colors of the rainbow. Big type. Italics, exclamation points, tawdry illustrations, bewildering diagrams—he exhausted every printer's device in emblazoning the glories of Tontine. Competition between the two great Tontine companies soon became animated and unscrupulous. If life-insurance had ever been a dignified profession it soon abandoned all pretensions. In the chase for new business, Beers never caught up with Hyde, though in the '80's both left the Mutual far behind.

## The Mutual Declarers War on "the Tontine Game"

In the Mutual Life, indeed, the newfangled life-insurance did not make such startling progress. Above all, the Mutual aimed at respectability; and its directors rested uneasily under the violent criticisms made upon Tontine. President Winston never displayed much enthusiasm for it. He was definitely decided against it, according to tradition, by a chance meeting with the wife of one of his insured. Her husband, she said, had foolishly taken out a Tontine policy, had had reverses and could not make his future payments, and consequently must lose everything he had put in. "If it were only a regular policy," she added, "we might pinch a little and pay the premiums; for then we could stop any time and get a surrender value; but, as it is, we must throw the whole thing up." She expressed her opinion of such life-insurance in terms that impressed upon President Winston its iniquity. He decided that it must ultimately become unpopular and weaken any company that practiced it. The Mutual, therefore, not only abandoned the Tontine policy, but engaged in a vigorous campaign against it. In advertising circulars and in official reports President Winston pointed out its injustices and inevitable consequences. The Mutual's criticisms make especially entertaining reading now, inasmuch as, of recent years, it has been one of the foremost advocates of the Tontine principle. Its fallacies and temptations, however, are nowhere more clearly and prophetically pointed out. "In the year 1870," said President Winston in his report for 1873, "the trustees consented to revive, in a modern and scientific form, the old plan of Tontine insurance. . . . But several cases of great hardship were soon forced upon the notice of the company. The plan made it obligatory upon us to forfeit every such policy absolutely and finally, if the premium were not paid upon a certain day, and left us no discretion to consider a claim for a surrender value. This experience satisfied the trustees that the plan, in its nature, is wholly outside the proper range of legitimate life-insurance, being little less than a contract by which the company binds itself to execute an unequal wager, securing the stakes to the winner. In such a wager as this, the most needy, whom life-insurance is especially designed to protect, are pretty sure to be the losers. Besides, the large accumulations which Tontine insurance gathers in the hands of a company, at the expense of those who die, or are unable to maintain their policies during the Tontine period, offer a strong temptation to wasteful expenditure, which, if indulged, must sooner or later bring disappointment even to the survivors of those who play at Tontine hazard." The Mutual flooded the country with circulars containing similar statements. "The Mutual Life-Insurance Company of New York," declared its most celebrated anti-Tontine document, "issues all kinds of legitimate life and endowment policies, and the premium rates are lower than those of any mutual company in the world. But it does not issue Tontine policies; nor encourage anyone to engage in the Tontine game. The principle of the game is to rob the unfortunate by canceling their policies without consideration, when it is found impossible to raise the money for premiums; and the object of the game is alleged to be the opportunity for companies which pay very small dividends to conceal the fact for a term of years called a 'Tontine period.' We advise every man to beware of any company which engages in the Tontine game." Again the Mutual declared that Tontine "depends upon speculation in human trouble and misfortune for its 'estimates' of future profit, encourages a gambling instead of a saving habit—boldly intimates that the chances of winning are in favor of the rich,—and exposes one of its many cloven feet in its claim to exclusive ownership of a large surplus which should by right belong to the whole company. In short, Tontine is simply speculating on the prospective misfortunes of humanity."
Tontine thus precipitated the first great Mutual-Equitable war. Henry B. Hyde naturally led Equitable's forces; Richard A. McCurdy marshaled the Mutual's hosts. McCurdy at that time had direct supervision, as vice-president, of the Mutual agency force. Thus he came into immediate contact with Hyde, and realized, more keenly than anyone else, his vigorous and effective competition. In 1872 McCurdy had not quite reached his fortieth year. In bearing he was the reverse of Hyde; he had been well-born, carefully educated; had none of the rough and ready manners and willingness to recognize real worth that, in spite of his many faults, so endeared Hyde to his associates.
McCurdy regarded Hyde with contempt, as a social and business inferior, and did not even recognize him on the street. Like Winston, he looked upon the Equitable as an impertinence; a feeling not at all assuaged by the remarkable progress it had made. Hyde, the Mutual's discharged employee, actually wrote more new business each year than the Mutual Life. From 1868 to 1873 the Equitable issued more policies than any life-insurance company in the world. At all hazards McCurdy decided to humiliate the youthful giant.
The favorite weapon of life-insurance warfare, then as now, was the defamatory circular. The companies printed these by the thousand and placed them in the agents' hands for use on critical occasions. These circulars had one great advantage; they were seldom issued as official documents, were anonymous, and thus, in case of necessity, could be easily disavowed. McCurdy, in 1872, started a circular campaign against the Equitable. He put in printed form the current Equitable scandals, accused it of all manner of frauds and outrages, and attacked, with special severity, its new form of policy. Hyde, it may be supposed, did not remain inactive. He had spent several years in the Mutual's office; and knew its weak joints even better than McCurdy himself. He found a valuable ally in one Stephen English, at that time editor and proprietor of the most ably conducted insurance paper of the day. English was a wild Irish adventurer. He had served as chief of police at Leeds and Norwich, England, and, emigrating in the latter '60's, had plunged into insurance journalism. As a writer on life-insurance topics, he ranked far ahead of the venal blackmailers who then so largely infested the insurance press. In a few years be became the terror of the insurance world. When not pounding away at solvent concerns, he was singing the praises of dishonest ones. He did his best to ruin the Connecticut Mutual, always a tower of honesty; and was a leading journalistic supporter of the Universal, the most scandalous fraud of the time. For several years, up to 1872, he had had only honeyed words for the Mutual Life. He publicly boasted that he was its "organ." He personally acted as Winston's representative at prosy elections, and hounded any man who breathed the slightest criticism of the Mutual's management. Then suddenly, for no publicly explained reason, he turned his broadsides against them. Observers noted that his change of heart coincided with Hyde's onslaught on the Mutual, and that the advertising patronage of the Equitable and the New York Life perceptibly increased.
    2↑ Testimony of Richard A. McCurdy before the Insurance Committee of the New York Legislature in 1877 (page 315).
       Q. You published pamphlets of what you claimed were frauds and outrages perpetrated by the Equitable? A. Yes, sir; we published a good many lively documents at that time.
       Q. Well, about how large a number? A. Just as many as I could get out—just as many as I could think of.

## A Mutual Investigation of 1870

The Mutual openly charged Hyde with instigating these attacks. In ferocity they far surpassed McCurdy's onslaught on the Equitable. English had, as we have seen, abundant material. Winston's "bonuses," his dead son's revived policies, his loans to his trustees, his favoritism to his relatives, his corruption of the legislature and the insurance department—all these were matters of official record. In 1870 the Superintendent of Insurance, George W. Miller, and James W. McCulloh, a special representative of the New York Assembly, investigated the Mutual. They uncovered all these things and many more. McCulloh displayed such industry, indeed, that the Mutual, in spite of the fact that he represented the Assembly, prohibited his further access to the books. "There has been far too much leakage here," declared Winston. In face of all these disclosures. Superintendent Miller submitted a whitewashing report, which the Mutual spread broadcast as a complete vindication. Some years afterwards, the Mutual admitted on the witness stand that they had paid Miller $2,500 for this report. They not only got a favorable report, but compelled Miller to suppress the official testimony. The Mutual furnished their own stenographer, and, after the investigation ceased, copyrighted the minutes. They took this method of suppressing the damaging evidence the officers had given against themselves. McCulloh obtained a copy and was threatened with prosecution if he made public use of it. Miller took the official copy up to Albany, and it has never been seen since. Superintendent Hendricks made a thorough search for the present writer and reported that it was not in his archives. It was located finally at the Library of Congress, where it was deposited, of course, to protect the copyright. If Superintendent Hendricks's recent investigation of the Equitable Life had been officially suppressed, and if the Equitable had copyrighted all the testimony and thus prohibited its public use, we should have had a proceeding precisely parallel with that engineered by the Mutual Life thirty-five years ago. Miller was the only one who suffered because of this high-handed proceeding. It, and similar financial transactions with other companies, cost him his official position. One of his appointments to office in the insurance department, it is now interesting to note, was that of John A. McCall, then an obscure Albany politician.
    3↑ "Examination of Witness Before George W. Miller, Esq., Superintendent of the Insurance Department of the State of New York. In relation to certain charges against the officers and trustees of the Mutual Life-Insurance Company of New York. Entered, according to Act of Congress, in the year 1870, by the Mutual Life-Insurance Company of New York. In the clerk's office of the District Court of the United States for the Southern District of New York."

## A Martyr to Free Speech

In so viciously attacking Hyde, the Mutual thus treaded on dangerous ground. Someone evidently furnished English a copy of this suppressed testimony, for he used it tellingly, McCurdy and Winston then tried another tack. They told Hyde that, if he didn't cease his onslaught, they would reduce their premium rates. In the latter part of 1873 they made good this threat. Their own policy-holders now took sides with Hyde and English, They held public meetings all over the country, and, at times, stormed the offices of the Mutual Life in New York. They objected to being used as clubs with which to attack the Equitable. They declared that the Mutual, in lowering its rates, had threatened its own stability. Above all, the old policy-holders objected to paying the full premiums while new members got in at a 25 per cent reduction. They made things so warm for Winston that he finally withdrew the schedule. English renewed his assaults; the exchange of defamatory circulars still went on. In a moment of desperation Winston had a charge of criminal libel lodged against English. The doughty editor fled to Jersey City; but in an unguarded moment returned to New York, and was nabbed by the police and rushed into Ludlow Street Jail. Winston sued him on a multitude of charges, and caused him to be held on $200,000 bail. English naturally could not furnish sureties to this amount and spent more than six months in prison, awaiting trial.
These proceedings set the whole town into an uproar. English, in a way, became a popular hero. He edited his newspaper from his cell, attacking Winston more violently than before. He pictured himself as a martyr to the cause of free speech; and declared that the Mutual Life had sought to gag him. In the public mind the matter now assumed greater proportions than the mere personalities of those engaged. Attention centered upon the incarceration, by the most powerful corporation of the day, of a comparatively uninfluential citizen; and upon the fact that it persistently refused to bring the man to trial. There was a strong conviction that English, whatever his motives or personal shortcomings, had told the truth. English became a popular theme with those who preached against the growing power and arrogance of corporations. The Assembly sent down a committee to investigate. It held many sessions, took a large amount of testimony, and submitted a report entirely favorable to English and entirely unfavorable to the Mutual Life. It virtually declared that nearly everything English had written against the Mutual was true. English's imprisonment, it added, was a just cause of "grievance and a proper subject of relief"; and it declared that Winston's chances of obtaining damages against him were exceedingly remote. The Mutual Life now faced a most embarrassing situation. English, still in jail, attacked it with renewed enthusiasm; the Equitable diligently scattered broadcast, with the aid of its agents, the Assembly's report against it. Its business fell off rapidly; in one year it lost $17,000,000 of new insurance.
Winston now approached Hyde with a flag of truce. The Mutual promised in the future to let the Equitable alone, if Hyde would only quiet the editor of the Insurance Times. As McCurdy expressed it: "Hyde called off his dog and we called off ours." Hyde also had had enough, for his business had also suffered. He bore to English, however, more than merely President Winston's apology. He handed him a sum of money sufficient to assuage his wounded feelings and reimburse him for his incarceration. English himself admitted, on the witness stand, that he had been paid money, but declined to state the amount. Afterward when asked frequently what reason he had for dropping his fight against the Mutual he always jocularly replied: "I had thirty-five thousand reasons." Released from jail he at once became a warm defender of the Mutual. He waxed rich on the patronage of the Mutual and other large companies. He lived in a large and beautiful house In Brooklyn, and, when not fighting the battles of the New York companies, spent an elegant leisure cultivating strawberries and collecting etchings.
    4↑ New York Assembly Document 155: 1873.
    5↑ New York Insurance Investigation, 1877 (p. 315).
    Testimony of Richard A. McCurdy.
       Q. Was not this settlement between English and your company brought about by the intervention of Mr. Hyde, president of the Equitable? A. That is only presumption an my part; I was waging war an the other side, and I was not a party to the compromise and was very reluctant to have it made,
       Q. Was it not a fact that the war between your company and English and the war between your company and the Equitable, ceased at the same time? A. Yes, sir.
       Q. And Mr. Hyde was regarded as the backer of English as against your company? A. He was.
       Q. This arrangement or compromise was brought about, as you understood it, by Hyde having to quiet English and the whole thing stopped? A, Well, he called off his dog and we called off ours.
    6↑ Ibid (page 437).
    Testimony of Stephen English.
       Q. Were you paid anything, or agreed to be paid anything, by or on behalf of Mr. Winston on that subject? A. For false imprisonment, loss of business, loss of property and everything else, yes.
       Q. How much? A. I don't know that I have the right to mention how much.
       (Question ordered withdrawn by the Committee after a long wrangle.)

## Mutual Begins to Rebate—Officially

This peace, however, proved only temporary. All through the '70's the warfare burst forth repeatedly. It was a trying period for Winston and the Mutual. Every day the Equitable gained upon its older rival. Hyde purchased Mutual agents right and left; its entire agency system, according to President Winston's own words, threatened to become "so impaired that years would be required to restore its efficiency." Rebating now became a regular feature of life-insurance competition. This, it may be explained, is the agent's practice of dividing his first year's commission with the new policy-holder. This custom, now one of the greatest scandals of the business, is the direct outcome of the Mutual-Equitable warfare of the '70's. Hyde, by paying such enormous commissions on first year's business, made it possible for the agent to pay back a good part to the insured and still make a fair profit himself. The Mutual withstood the strain for some years; and then went the Equitable one better. In the fall of 1878 Winston and McCurdy issued a famous pronunciamento, publicly offering a 30 per cent rebate, on first and second premiums, to all new policy-holders. Rebating had become so open, they declared, that any attempt at concealment was absurd; instead of letting the agent make the rebate, they therefore proposed that the company do it directly. Similarly amazing were the instructions given the agents. The Mutual authorized the acceptance of a demand note for this 30 per cent rebate. If the applicant expressed anxiety that he might actually be held liable for this note, the agent was to quiet him by writing "without recourse" before the signature. "But," added the Mutual, "do not do this unless it shall be absolutely required." In other words, the agents were directed to trick the policy-holder into giving a good note, if possible; if not, why then to accept a fictitious one. Winston succeeded only in making the Mutual ridiculous. There was then as much public sentiment against rebating as now; and the offer of the largest and oldest and most dignified company to do the thing itself was too much for the national sense of humor. Winston was soon obliged to withdraw the plan. He was now in his eightieth year; the decreasing importance of the Mutual and the steady growth of the Equitable were embittering his old age. As a final checkmate, he again reduced his premium rates 15 per cent. Hyde only laughed at him. His official reply was an increase of his agents' commissions; and another raid on the Mutual's force. The public preferred the higher priced speculative insurance to the lower-priced old-fashioned article. A year or two after the Mutual cut its rates the Equitable wrote twice as much new business.
Winston's battle had its pathetic and its creditable side. Unfortunate as many of his official acts had been, in the main he upheld conservatism. He would not advance the Mutual by the reckless methods adopted by Hyde. Every move the Equitable made, President Winston opposed. In 1873 Hyde invaded Europe; a few years later, South America. Winston promptly and accurately pointed out the dangers of the innovation, and declared that the Mutual would never follow suit. "Other companies may go to the West Indies, Central and South America," said President Winston in an official report, "but not the Mutual. It is not fair to introduce risks on bad lives, especially when exposed to deleterious climatic influences. The rate of exchange greatly interferes with the transmission of funds; executive powers cannot be safely deputed to agents; the remoteness of the field of action offers temptations to frauds; the customs and usages of foreign countries would often render compliance therewith a matter of extravagant cost. The home field affords ample scope for the exercise of whatever capacity and energy any company may possess." Again president Winston frequently argued against that besetting sin of the modern life-insurance company—the craze for size. In 1874 the Mutual announced that it would issue policies only up to 100,000 lives; after that, take new risks only to fill such vacancies as occurred. Winston constantly attacked the Equitable's huge surplus. "These accumulations," he said, "instead of being a surplus adding to the security of the general policy-holder, are simply unpaid or deferred dividends, withheld from the special beneficiaries, not to be directed to the use or benefit of the general policy-holder without a breach of trust." In other words, Winston scored nearly every life-insurance idea which the Mutual has since conspicuously made its own. He died in 1885; Richard A, McCurdy promptly succeeded him. McCurdy at once surrendered to Hyde. He converted the Mutual Life into another Equitable. He made the Mutual a Tontine company; and established agencies abroad. He entered the race for bigness, and began heaping up that huge surplus against which President Winston had so strongly and truthfully preached. He showed even less moderation than Hyde himself. By using Hyde's methods he built up an enormous company, but at tremendous cost to Mutual policy-holders. Since 1885 dividends in the Mutual Life have regularly diminished.

## Jacob L. Greene Takes the Policy-Holders' Side

Elsewhere the battle against Tontine still went furiously on. In Jacob L. Greene, President of the Connecticut Mutual of Hartford, and in Amzi Dodd, President of the Mutual Benefit of New Jersey, old line life-insurance found vigorous and successful champions. Under Mr. Greene the Connecticut Mutual not only refused to follow the New York example, but fought it wherever it appeared. Jacob L. Greene was fitted by intellect and temperament for the great part he was now called upon to play. He was born on an upland farm in Maine, received his early education at a district school, and prepared for the bar at the University of Michigan. He early enlisted as a sergeant in the Civil War, saw much action, was brevetted lieutenant colonel for "distinguished gallantry" at the battle of Trevillian Station, and spent several months in Libby Prison. When the war ended he entered life-insurance as an agent for the Berkshire Life-Insurance Company, soon became its secretary, and in 1871, went to the Connecticut Mutual, Here he rose rapidly; and, in 1878, became its president. He had a marked aptitude for mathematics, and had written largely and well upon certain broad life-insurance questions.
Mr. Greene acquired the leadership of the Connecticut Mutual at a critical time. His company had started in 1846, when a few citizens of Connecticut associated themselves for mutual life-insurance protection; and it had always stood as a living embodiment of New England industry and thrift. When Mr. Greene entered its service it ranked next in size to the Mutual Life; the Equitable and the New York Life had only about half its assets. In the financial panic of 1873 the Connecticut Mutual had suffered seriously in its real estate investments; and had to purchase at foreclosure a large amount of mortgaged property,—of which fact its competitors always made the most malicious use. Again, when Mr. Greene assumed control, the country had just passed through a life-insurance panic. Not far from thirty companies in New York State alone had collapsed; the grossest frauds in their management had been disclosed; life-insurance, like the railroads, had its Jay Goulds and its Jim Fisks; their wrecking, for the purpose of private profit, had become a staple industry. Demonstrated rascality, gross mismanagement and extravagance, had shaken public confidence in the whole institution. Hardly any company escaped; the Equitable was commonly declared to be insolvent; the strength of the Mutual was called in question. In face of this experience, few companies showed any disposition to reform. Hardly had the storm subsided when, under the leadership of Hyde, they plunged into new excesses. "In the future," declared Frederick S. Winston, " the struggle will be between conservatism and audacity."
In 1878, President Greene thus stood at the parting of the ways. He faced a clearly defined issue. He had, on the one hand, the option of adopting all the New York methods—high commissions and salaries to agents, reckless advertising, great office buildings, the pursuit of foreign business at the expense of the American members, the adoption of new speculative forms of insurance. In that direction lay success, as most Americans then esteemed success. Thus, and thus only, could Greene maintain the comparative size and assets of the Connecticut Mutual. In this way, of course, he would greatly prejudice his old policy-holders; make their insurance more expensive. On the other hand, Greene could maintain all the old traditions; keep foremost in mind the interests of his present members; furnish them life-insurance at its lowest cost consistent with absolute safety; maintain in its integrity the mutual principle; refuse to increase his agents' commissions; and refrain from popular innovations. In that direction, however, lay apparent failure. Thus would President Greene sacrifice his company's standing as one of the "big three," and drop from second, perhaps to fourth, fifth, or sixth place, Mr. Greene did not hesitate. He put aside success obtained at the great price then demanded; deliberately relegated his company to a subordinate position, judged by the standards of mere size; and for more than thirty years remained the foremost defender of conservative ideas.
Life-insurance was part of Mr. Greene's very being. It was not an occupation, a business; it was a religion. He viewed it in its broad social and moral aspects. It saved millions to the state in the prevention of pauperism, therefore it was a powerful factor in social economy. It was a monument to family affection, therefore it conduced to public morals. It was made possible only by family coöperation, by the joining of the many to bear the burdens of the few; therefore it represented, as did no other institution, human brotherhood. Above all, it rested upon absolutely secure scientific grounds; it was thus a product of human progress in intelligence. In the conduct of his company Jacob L. Greene constantly kept these ideas in mind. Rivalry among companies, except rivalry in best promoting these aims, he detested. He regarded, and properly, the position of a life company as identical with that of a university: an institution engaged, not in money making, in promoting the private interests of its trustees, but in disseminating public benefits. In his eyes a life-insurance president who used his position for private enrichment should be regarded as would be a university president who speculated with the university funds. He regarded life-insurance simply as a family protection; on the part of the insured, he declared again and again, it was a purely unselfish act. No policy-holder must himself expect to benefit from his policy. He opposed all innovations not conducive to this end. At times, in carrying out this idea, he went to what many reputable authorities deemed extremes. Thus, he took a strong stand against the cash surrender system. He declared that, once a man had entrusted to his keeping certain sums for his family protection, the insured had no right to withdraw them. The company had accepted this money as a trustee, and under no conditions must it use it for any other than the intended purpose—that is, life-insurance. Should poverty prevent the payment of premiums, Greene believed that the accumulation should be used only in buying a paid-up policy. Once insured, always insured, was his motto.
The company's function, from Greene's point of view, was limited simply to providing this family protection at its mathematically ascertained cost. He stood powerfully for the mutual idea. For a company to discriminate among its members, to furnish some life insurance cheaper than the rest—this was the crowning evil. Naturally his soul revolted from the Tontine system, which was based upon forfeitures and the enrichment of the more fortunate at the expense of the poor. Mutuality was also violated when new members were admitted at the expense of the old. He refused to purchase new business with the dividends of those already in. He paid such low agents' commissions and made what were regarded as such illiberal agents' contracts that he had the utmost difficulty in getting efficient men. While Hyde, Beers, and McCurdy paid large salaries and 50 or 75 per cent of the first premium and handsome renewals, Greene offered 30 per cent, with no guarantee of renewals at all. While the New York companies advanced hundreds of thousands of dollars on commissions, Greene refused to advance a single penny. He had no contract that he could not break at will; and, in case an agent died, his interests in commissions died with him. Greene's ambition was, not big commissions to his agents, but big dividends to his insured. Again, he rebelled against certain "liberal" ideas introduced by Tontine companies—notably their so-called "incontestable policies." He regarded the payment of the claims of suicides as a violation of the mutual idea. He declared that a man who, unless insane, committed suicide in order to benefit his family, did precisely as the man who fired his house in order to collect the fire insurance: he practiced a fraud upon his associate insurers. The act was, Greene declared, "the very essence of swindling," and "as destructive of public morals as of honest contract obligations." He regarded the departure of a New York company, in offering to pay a suicide's claim the day after issuing the policy, as one of the most immoral acts ever promulgated in the name of life-insurance.

## New York-Hartford Warfare

When Hyde began his campaign he found the Connecticut Mutual, next to the Mutual Life, his most formidable competitor. Naturally he opened his broadsides against it. He used the tactics so effective against the Mutual Life. There was hardly one of the Connecticut Mutual's leading agents, declared Greene, who had not received offers from New York. In the latter '70's and early '80's Hyde formed an offensive and defensive alliance with the Mutual and the New York Life for the purpose of crushing their Hartford rival. There is no more shameful chapter in our financial history than the hounding that followed. They distributed broadcast circulars and pamphlets; but, above all, used the New York insurance press. Several leading insurance papers started a campaign of wholesale abuse against the Hartford company. C. C. Hine, editor of the Insurance Monitor, and our old friend Stephen English, editor of the Insurance Times, led the assault. Charles J. Smith, editor of the Insurance Record—that same Smith who figured in the recent New York insurance investigation, as the maker of public opinion, at a dollar a line, favorable to the Mutual Life—played an active, though less conspicuous part. For several years these insurance journalists made a specialty of the Connecticut Mutual. They filled column after column, issue after issue, with the wildest abuse. At times they had little else In their papers. They even issued "extras" devoted entirely to the Hartford company. They assaulted Greene personally. Because he refused to adopt the modern methods, they described him as an "old fogy"; because he wrote, for several years, a decreasing amount of new business, they called him incompetent. They cartooned him, assailed him in doggerel verse, and called upon the policy-holders to eject him from office. They attacked the solvency of the Connecticut Mutual itself. They found a choice morsel in its foreclosed real estate. They even had valuations made of it, and published these as sure proof that the company had gone to the wall.
The editor of the Insurance Monitor declared, in his own columns, that he had sold copies of his paper containing these attacks "by the ton." His standing price for his Connecticut Mutual extras was $50 a thousand. The purchasers made little attempt to conceal their identity. Greene openly charged that the Equitable and the Mutual prepared many of the articles in their own offices. He named particular authors of particular articles. That they remained for years the favorite canvassing documents of Equitable, Mutual, and New York Life agents was notorious. Connecticut Mutual policy-holders were inundated; leading citizens of American cities were overwhelmed. Anyone even mildly contemplating life-insurance inevitably received, through the mail, a marked copy of the Monitor or the Times. Many of these articles were found mailed in Equitable envelopes. Greene, over his own signature, charged that the New York companies had spent $500,000 hounding the Connecticut Mutual.
President Greene met all these attacks in the open. He replied directly to Henry B. Hyde, Richard A. McCurdy, and William H. Beers. He did not assault the companies or the men, but their methods. He regarded himself as a chosen instrument to expose existing life-insurance quackeries. He discussed, in his annual reports, not only his own company, but the whole philosophy of life insurance. He attacked the very evils which have recently occupied the public mind. In particular he exposed Tontine insurance. He denounced it as gambling, as thus subversive of public morals; as merely a scheme for accumulating a huge expense fund and enriching life-insurance managers and stock-holders. "Where in human history," he asked, "has so enormous a game been attempted or conceived? What colossal gambling! For what a peculiar stake—the protection, the living of widows and children! . . . The results by which life insurance is to stand at the last will be the amount of protection given to families, not the amount of which they have been robbed, not the profits it has been made to yield in a game of chance, nor the magnitude of the game which has been set going in its name." He wielded a caustic pen. In 1892 the New York companies appealed for a law restricting the amount of new business they could write each year—though not, as it afterwards turned out, in good faith. "This reminds one," said Greene, "of the debauchee who asks to be put under restraint until he can recover sobriety and self-control." He ridiculed the "costly advertisements in a multitude of papers whose ignorant praise is dearly paid for." He riddled the Tontine estimates, showing by mathematics that they never could be made good. "Companies whose premiums are eaten up by extravagance," he declared, "hold out the prospect of unexampled returns of surplus. But," he added, "the glitter of big figures quite overbears such sober facts as the multiplication table and the moral law."

## Greene Declines to Compromise

About 1885 the New York-Hartford war became particularly lively. Greene carried his case into the newspapers. His long letters in the New York Tribune, pointing out the tendencies of Tontine, created a great public sensation. Hyde, McCurdy, and Beers replied through the same medium. They now repeated, over their own signatures, practically all the slanders the insurance journals had spread broadcast for years. They attacked Greene personally, attributing his criticisms to professional jealousy; called attention to his comparatively small amount of new business; and broadly intimated that his company was insolvent. Greene replied vigorously. The discussion aroused the greatest public interest; the letters, on both sides, were generally republished; the public, for the first time, began discussing Tontine. Two legislatures, New York and Ohio, appointed committees of investigation—the result of which will be described subsequently. Business was affected; policy-holders began to turn away from Tontine. In fact, Hyde and McCurdy thoroughly tired of the subject, and sought some way of stopping the discussion. In the early part of 1886 Greene sent a four-column letter to a leading New York paper. The editor forwarded a proof to the Equitable, inviting a rejoinder. The Equitable threw up its hands. It had had enough. It consulted with the Mutual as to the best way of ending the war. They finally sent for James G. Batterson, President of the Travellers Insurance Company of Hartford. Couldn't Mr. Batterson call Greene off? Above all, couldn't he persuade Greene not to publish that letter? If Greene would only keep quiet, they promised to cease their ten years' onslaught. If Greene would stop exposing Tontine, Hyde and his associates would pledge their word never again to attack the Connecticut Mutual. They authorized Mr. Batterson to make this proposition in so many words.
President Batterson returned to Hartford and delivered the message. He and Greene were never afterwards friends. The latter ordered his letter printed; and followed it with another, describing the attempts made to shut him off. His attacks, he declared, had not been started for the purpose of purchasing immunity, but to discharge what he regarded as an important public duty. "I will not stop," he declared in an open letter to the New York presidents, "until I have done that which I believe my duty, to wit: to thoroughly inform those, the welfare of whose families is involved, as to an abstruse matter which I know they do not understand, and which I think I do: and I must leave with you the responsibility for continuing or stopping the attacks upon the Connecticut Mutual and myself as you may deem best for the interest of your companies and yourselves, the good of the public, and the benefit of legitimate life-insurance," He was as good as his word. Until the day of his death President Greene hammered away at Tontine. To a great extent, however, the public forgot his preachings. That he was eternally right is now only too clearly apparent. The New York legislature has recently enacted into law practically all the reforms for which the Hartford president contended. One of the most pathetic episodes in the recent situation was the death of Jacob L, Greene just as his hard-fought battle had been won. He died in March, 1905, on the eve of the Equitable upheaval.

## Amzi Dodd's Efforts for Reform

In Newark, Amzi Dodd also stood for many years a foremost advocate of legitimate life-insurance methods. Like Greene, Mr. Dodd was both a mathematician and a lawyer. He had served for many years as vice-chancellor of New Jersey and had also figured conspicuously in public affairs. He joined the Mutual Benefit Life in 1863; held the position of mathematician from 1865 to 1882; and the presidency from 1882 to 1901. In that period he stamped his personality and his convictions upon his company. He took a firm stand for the mutual idea. Like Greene, he opposed the new theories promulgated by the Equitable. He combated the idea that mere figures signified; he refused to write business not only abroad, but in certain parts of the United States which he regarded as unsound. As far back as 1878 he demanded reform in agency management; extravagance, he declared, was one of the greatest menaces to life-insurance. Like Greene, he had to meet unscrupulous competition. The New York companies never attacked the Mutual Benefit quite so viciously; but they constantly raided its agency force and indulged in the usual literary campaign against it. Dodd was not so combative as Greene; he did not hesitate, however, to fight for his convictions. He sharply criticised the Mutual Life's official rebate plan of 1878. In particular, he scored the Mutual Life for its illiberal treatment of lapsing policy-holders.
Dodd's great contribution to life-insurance is the non-forfeiture plan adopted by the Mutual Benefit in 1879. His company, compared with the standards of the time, had always shown much conscience in the treatment of lapsing members. Dodd's attention was directed to it from the first. His earliest reports as mathematician pointed out the need of reform. Naturally he abhorred the Tontine system. Hyde had made forfeitures the very foundation of his society; Dodd promptly went to the other extreme. He made non-forfeiture the prevailing idea of the Mutual Benefit. Hyde sought every opportunity to confiscate the equities of his retiring members; Dodd adopted a plan by which such injustice became impossible. In 1879 he offered the lapsing member two options: a paid-up policy in exchange for his reserve, or the application of the reserve in the payment of premiums upon the old policy. He extended this privilege not only to new but to old policy-holders. That is, he refused to take advantage of the forfeiture clauses written before the days of enlightenment. Again, his plan worked automatically. Lapsing policy-holders, up to that time, had been obliged formally to notify the company that they expected a surrender value. If they neglected this formality, they received nothing at all. This provision frequently worked great hardships. On no subject has ignorance so generally prevailed as in life-insurance; and people by the thousands dropped their policies, unaware that they were entitled to any return. Others, through illness, unexpected absence, sudden insanity, or carelessness, failed to send such notifications. Dodd, therefore, provided in every policy that, if the lapsing member selected no option, his reserve would be used until exhausted in continuing annual premiums on his policy. That was, no man could forfeit his policy however hard he tried. Many bereaved widows have been amazed to receive checks, in payment of policies, from the Mutual Benefit Life-Insurance Company. Their husbands had formerly carried policies, they knew, but supposed that they had dropped them years before. Amzi Dodd, unknown to them, had taken the reserve value, at lapse, and applied it to continue premiums. Whenever the insured died before this money was exhausted the full face of the policy was always paid. In working out the details of these reforms Mr. Bloomfield J. Miller, the late mathematician of the Mutual Benefit, shares the credit with Amzi Dodd.
Mr. Dodd did not go to such extremes as President Greene. He did not share the latter's views on cash values, suicides' claims, or even on the management of the agency force. He made no hysterical bids for new business; he did desire, however, a steady and healthy growth. He would not meet the high commissions paid in New York, but he did pay slightly more than Greene, and made more popular agents' contracts. His company thus acquired the reputation of being progressive without adopting the excesses of the time. Thus Amzi Dodd succeeded where Greene had failed; he increased the size of his company. He also kept the Mutual Benefit free from scandal. His strength was clearly brought out in 1896, when the Republican National campaign committee called upon the Mutual Benefit, as upon all the large insurance companies, for a contribution. The usual arguments were made—the moral issues involved, the duty of protecting the policy-holders' assets from depletion, and so on. It was a time of great excitement, and high-minded men might readily be led astray. The venerable president, however, brushed aside all sophistries of this kind. If the Mutual Benefit Board must subscribe, he declared, let them subscribe as individuals, out of their own pockets, but not a penny of the policy-holders' money must be touched. Thus the Republican party had to worry along without financial assistance from this source.