The Sun.
London, England, 1852-12-28 00:00:00

are—

early years ; an unsound one even may run on very
smoothly for many years, but if its basis have been er-
roneous, a time will assuredly come when its inability to
perform its promise will be declared ; and the longer
that that declaration is delayed the wider the misery
that will be diffused. It cannot have escaped observa-
tion that, amidst many other blandishments recently
offered by the projectors of new assurance offices, " the
lowest rates of premium possible, without compromising
the safety of the institution," are put prominently for-
ward. Who, in his senses, would consign the premiums
of, as he hopes, 20 or 30 years, into bands so regard-
less of unquestionable safety, or to one so willing to
stand upon the very brink of a precipice, into which any
casualty, an unforseen one, perhaps, may precipitate him.
The second, third, and fourth propositions above enu-
merated are self-evident, and do not require a word of
elucidation ; but the fifth is so intimately interwoven
with the welfare of assured persons, that I may be par-
doned in venturing a few words upon it. It forms,
indeed, in conjunction with the question of rates, the
very essence of the warning which the board is
anxious to give. Whatever estimate may have been
put upon the increased duration of life, it will not
be believed that the lowest rates of premium now
offered can be based upon the lowest rate of interest.
But whilst the rates of premium are reduced in almost
every new project, a rate of interest is prevailing which
is lower than at any former period, and is likely to con-
tinue extremely low for many years ; whilst the public
funds have attained a height at which, from their ex-
treme sensibility to very slight incidents, it would be
dangerous to make investments. With a diminished
capital, and a diminished rate of interest, the board has
not faith in the promises of enlarged advantages ; and if
for the purpose of obtaining higher rates of interest the
funds of the assured be invested in securities of a more
questionable and hazardous character, then does the
danger become more imminent and distressing.
I have expressed the opinion of this board that reck-
less competition has had much to do in the formation
and conduct of modern life assurance societies. This
board is not hostile to any legitimate competition ;
it has ever advocated it in matters of commerce as
the mainspring of industry. But these two species of
competition are in no way analagous ; competition in
trade cannot be long continued beyond the point
of securing some profit, it will cease with the
means of the disturber ; his operations are open to the
observation of all who deal with him—they are brought
to issue within a short period—and no one is compelled
to trust capital to him. If he fail, it is he who has sold
his wares below their cost who makes default ; it is the
seller who suffers. But in a life assurance the case is
essentially different ; there is competition, indeed, in
selling at prices below the cost, but the purchaser is
compelled to make fresh payments year after year—he
has no discretiori in the use of his capital—he knows not
how, except to pay the expenses of management, it is to
be applied ; his danger may not be apparent for many
years, and when discovered he cannot fiy from it with-
out extreme loss, perhaps ruin. If default be made, it
is the unhappy purchaser who has to suffer.
I do not press the subject further, not for lack of
points for animadversion, but because I think that,
together with the observations contained in your
letter, enough has been said to cause due consi-
deration in those who wish to purchase a life assur-
ance. It is not the object either of yourself or of this
board to discourage life assurances ; we should both, on
the contrary, most cordially encouraging them ; we
would exhort every one, however, to use the utmost cir-
cumspection in the choice of their assurers. It is evi-
dent to this board that there is great danger ahead,
which no act of the legislature can effectually avert, and
which can alone be avoided by a resolute rejection, on
the part of the public, of overstrained and suspicious
offers. This is the advice which we give to all, but
especially to the younger members of our community,
whom we would nevertheless counsel to enter into life
assurances with sound and well established offices ; and
we would emphatically impress upon those who wish to
invest their savings or their property in the purchase of
annuities never to forget that their safety will not, but
that their greatest danger may, consist in seeking to
obtain the highest rate of interest, and that their capital,
if once parted with to improvident hands, is gone for
ever. Let them consider that as with others who for the
present possession of capital will give exorbitant rates o.
interest, so may it be with assurance and annuity socie
ties.

I apologise for the length of these remarks, but the
importance of the subject would justify even an exten-
sion of them. They may possibly preserve many of
those who in the exercise of a most laudable course can
least afford to be dupes from future pangs. By order
and on behalf of the directors of the Chamber of. Com-
merce and Manufactures at Manchester.

THOS. BAILEY, Presiden
J. Y. Caw, Esq., Manchester.