New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1868-08-01
Prom Iasurilee Monitor" December i'51
THE CASH 49, THE NOTE SYSTEM
A REPLY TO THE HON. WILLIAM .BARSEs's SUGGESTION
TO THE NOTE COMPANIES.

A REPLY TO THE HON. WILLIAM .BARSEs's SUGGESTION
TO THE NOTE COMPANIES.
W.
Any friendly suggestion, emanating from
whatever source. made with the view OF improving the
present system Of Life Insurance, is entitled TO
the careful and respectful consideration OF all con
cerned A proposal coming from the superintend-
ent Oh te h nisuruno S g., DEPARTMENT has t.e
special attention It's hnal acceptance must however
depend upon its intrinsic value. AS have no reply
Companies, and believe that ought to be made
take the task My reply is not written the purpose of
provoking controversy OF finding fault with the
perinteudent but solely with the intention OF ecitng
the truth and of defending system which sincerely
believe TO be superior to the cash plan Mr. Barnes advo
Although no controversallst am prepared to
discuss the relative merits of the Gosh and note systems
with Mr. Barnes any one else willing 70 investigate the
question without personalities ana Win te cahuor Oh
sincere inquirer after truth
In ms Report Of 1867, Mr.. Barnes says
The superintendent begs leave to suggest 10 the Note
Companies, whether their and the public interests
would not be better subseryed in the future by making
all their premiums payable IN cash' mus p"g "' u"
companies oH q par ut uS respect" ,,--
In response to this implied counsel beg permission
10 prove by figures and facts that neither the interests
OF the companies of the public would be subseryed
by making all their premiums payable m CASH ana more
ever that would greatly suDseNe Tue INTERESTS vi pg
II cash companies were to become note companies mus
putting all companies on par ~ ms respect.
IL fact patent all that In the race for patronage,
note companies have far outstpped and continue TO
for this disparity 10 their progress II were 70 aege
that note companies have more energetic officers and
scrton were admitted account satisfactorily Tor the fact
of their transcendent prosperity. and II this Is not the
cause is 1t not attributable to the greater favor with
which the note system is viewed by the people
count Of tho accommodation II affords To persons OF
limited means Reasons less substantial than this could
not be fairly assigned for the remarkably RAPID growth OF
note companies compared with that OF companies al
herring to the cash system.
The cash paid by note companies for claims 1866
amounted to $428359 54 but the cash PAID by casn com
panes for claims during the same period amounted 70
only 81 1858 57,-which shows note companies pau
during last year two millions ana hdIf more tOr
losses than cash companies ms TACT demonstrates hot
that note companies had relatively more losses, but
that the amount of business transacted by them was
MES The gross assets OF note companies according TO
the last Report, amounted to s6o6o5,G95 2s The cash
assets Of note companies were estimated at 5i5o 49,
The total liabilities OF note companies, including guaran
tee capital amounted to S409iS 20 10 thus leaving
balance OF gross assets Liabilities OF about twenty
seven millions The gross assets OF cash companies
formed total Of only S309S22I4 3d. while their liabilities,
including guarantee capital up TO S22o6l73l %,
afOrng balance OF assets Liabilities Of less than
nine millions These figures demonstrate that the assets
OF note companies every dollar Of liability by 81 10
while the cash companies, sOc0ed by the same showing
This conrasted array OF plain figures speaks more
vncngy in favor Of note companies than could volumes
OF eloduence. IL proves that these liberal INSTITUTIONS
have completely outsrpped cash companies by nearly
SOeOOcO In assets and about 5OoOOo IN cash assets Is
accordingly appears that note companies grow aIuo9t
twice fast cash companies Surely this fact affords
conclusive reason why cash companies should be put
par with note companies, ana mus suDSefNe III the
future their interests aud that OF the public"
And here allow to advert 10 one important consd-
friend OF tho unfortunate and lover of humanity IL IS
reflection
the only system allowed or piacuced IN TINS country,
thousands OF widows and orphans TO whom claims
amounting to millions Of dollars have already been PAID,
would have been left destitute and miserable Tor u IS
well known 10 all experienced agents that thousands OF
policy holders. but for the accommodation Afforded by tue
note system would have gone uninsured 1t has indeed
become prominent fact OF history that no other imam
cia devised productive OF beneficial
results families of limited means-incalcuaby more
numerous than those enjoying cOmpetehcy-as the note
A few facts compiled from statements made to
the superintendent and from the tables constructed
come ind Incorrect, will shed additional light on this
subject The gross income OF note companies as given
income In cash Of note companies IS computed To he
sls6lIi5 so the gross Income Of cash cHEpaeS
shows gain in favor OF note companies III cash Income
Reside the sum total OF interest received in cash by
note companies amounted TO (J,l9A,l5 10. The gross
amount OF interest received by cash conpanles SUMMED
leaves balance IN FAVOR or note companies OF
INTO oasderation the improperly aud Injustice OF re-
fng TO regard premium notes as part or the assets OF
company appears In tue most palpaDie ght Ihey are
assets reality and Of the reliable and valuable
kind But Mr. Barnes, IN his Report OF 1850 FOL xxiii
saws: the intention OF the superintendent as
general rule to require Of American companies reserve
outstanding policies by valuation, according to the
English Life Table No 3-males at per cent interest
This should ultimately consist OF cash assets
only excluding all premium notes, deferred premiums
aud personal securities
earnestly hope that Mr. Barnes will carefully consider
tho facts and arguments have adduced before perpe
trating act so iulpoIiiic and absurd.
another conclusive proof OF the greater excellence OF the
latter for the reports show that the expenses OF cash
companies. gross income receipts during 1866 were
per cent than those Of note companies The gross
expenses OF cash aud note companies for 1866 exclusive
OF the paid for claims by each, stand thus re
corded Expenses OF note companies s5ss0.VS 81; OF
cash companies $3.0l0T4 il-hgures which show dit
ference OF n per cent In favor OF note companies
In still another important respect note companies are
superior 10 cash companies Their investments are pro
ductiye OF larger interest and safer and more
liable The investments represented by the notes OF
the policy holders made at once without the tenn
porary sacrifice OF interest without liability TO depreca-
non In value other securities or the posi-
bty OF loss from dealcaton The interest received by
note companies in their assets equals ~ n per cent
while the interest gained by cash companies on their
gross average only 29 cent The reserve OF
note companies be calculated with safety on the En-
gsh Table No. 35 cent but II Is incumbent on
cash companies TO keep reserve on the same table at
per cent per cent IL would represent them In
better condition than they really are, while tho note
companies would by the saue standard appear 10 as
inasmuch their condition would De better
than their exhibit Too much Importance cannot be at
tached 10 the accumulation by interest for upon this de-
ponds the payment OF large portion OF the immense
sums promised IN the distant future. For this reason,
and for many others In addition 10 those enumerated
above note companies deserving OF preference,
and IN tins belief, respectfully submit the facts nave
adduced to the impartial consideration OF life insurance
companies their agents, aud policy throughout
the country.