New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1871-02-03


Of company by fayoring either tlamselyes
their friends In the granting OF looms and Oftgages
unsafe Insufficient security. Mr. Miller considers tho
third danger 10 De Of far more serious ature"-tIe
possibly unsound basis upon which 90 npany may
transact its business either from enormously calculated
Of agents This question Of agents perhaps one u
the most important questions now anccifug LIE In
snrance companies. They great evils, Ind Jet
der ain the circumstance they would l. De- neces
sary eyis The amount " mischief which thcy 90 ~
misrepresentation, both 10 insurers and NJ red, b. IN
calculable, and their enploym no necessarily entails
heavy expenditures in the shape OF commissions
Could they be a. pensod WIN, - laf-e re-uetoa ln
the premiums which Insurers have iopay would follow
Theoretically the companies y99d hot oly take ~ %.
much Eet money but they %ona 'y, one sir sn Pnae
the less. The arrangement Woh1 stNe lI'Hi 'ohuhta
trouble enable them 10 manage WIN slil'F cereal
force and would obylate tie POSSIBILITY OF 'De qoi-cf
tons constantly occurring among a2eh'5 ~ - esl,
IDENTITY better and saT 70 maze ne si sid Ina i ~.
received slo which deducted by the agent forward
ng it,. But, strange 20 say, men, rs . 6tA Ilo IL
great advantages of life insurance ul skfhy -et no
fore them by agents whose business consists IN ehpau-
TIC clements Of safety life insurance consist IN sin
phhcaton, uniformity 10 the yagoS l a., s .os
wat hfulncss on the part Of BOTH stockga,ls ai ~
mutually Interested Unless the indepondent sources ~
control properly exercised mere VII ""af7 u" i"
tempta 10 needy uHpG. clped directors ana oia,
cIs 10 Bcrly their trust. Supervision, ul.T.ng and
untiring, IS the only preventive OF want o. integrity 10
great public companies Men must delote ilme ana en-
eGgy to looking aier the insurance heir ives proper
tonay it, value they do 10 the char< for "at5f
and as their Income tax the assessment Tor new
pavement The is transient. me o,er may involve
Tie penury and perhaps starvation OF their wives Hhu
The Importance Of the Interests involved VIII be rem
dcrcd more appreciabie by glance al some ~ Tie sta
stes OF NE insurance ana u ZIo%tl ID tIls n.S1 ~
cordn2 10 the report " the state Inspector 20 the Legs
! ness in the state OF New-Yorl They had 5000 oat-
standing policies lusurinS sl0o0oeO and their asft
date tie report OF the superintendent a. made
up ' we're no less than % co%Tes Gons cuisines
the State, having C-CO0 outstanding pohcics n-NFNS
thc enormous amount OF Sl'%1 10000, and with ACTS
named as SgZgOOj,OO0 These figures show that Though
the business or lie insnrdngr D. 10" - 80 lies as
companies ar only n 92J gLcs much. To preserve
the OF 1850 between the assets ana liabilities OF tie
companies, their should uOB 10 sJ,slt I'D cL-
cess OF what they Tits discrepancy E % be largely
accounted for ~ competition, the great expense OF
agents and by the generally increased oi.ce e1ieAh,
tuTes arising from the business being con Icted ~ an
unpleasant TACT tnot the percentage risks IN
force has decreased from hl55 10 l2iol4 Certainty
these Ggu.es arc pea ior SOM hse maps 10. 10,
%, tc ev ,>s ~ mana semcutlrl7t railway
companies have adopted the eystcm 81 aulagamaton;
T. 81 NOT oliite 50 rcat in The case III Insurance
iaoless, 'aSduiy great The gross rectots Of the
last report sTsg9o O51 ana TIE expenditure sjAH9 or
about 81 per cent of the gross eips Tie sross re-
ceipts Of an the companies Of Massachusetts Tor the
| sane year were sg5C0COO, and their expenditures
were S50acQ or about . per cent o. Tue g,o,a IN
the same wear, according 70 Poor's Ratigay NnHUdL
wero s5i9g -, ana yas rms biIe rIiiaeS
peudture IL Il per higher tan Insurance eXpond
tiS ~ T ne insrIrc@ c5fiauies cailot rs a
class sad 10 hc IN unhealthy condition lAo great
should have sufficient assets to rcinsure the amount VI
ia policies over and above rs other liabilities.
The aggregate asset, OF al the comp MES S 0J7-5
their current liabilities, inc udiug Ssi6,.ji capital stock
are si9c5q5t9 ana the valuation OF the reinsurance Of
ali their policies IS ouy SlO9o05g; showing tha,
INV wond lay. a Surplu, of 5sgOI.o40 Whils how.
| ever, these figures show, the companies are not
Oyertradng, and their business can be lnathenatlcaly
demoustra.clto De lucrative on TIE lasis OF the tDles
Of mortality in tiem j. it nor advisable to re-
gard with concern TIE fact that the percentage ot assets
TO II ks "a force has decreased cOuaIIcrAbyt
There g. a feature Of insurance manl2eInent more
common tian formerly, which sSCcms 20 have some
elements IN II for correcting the great eN OF eNtrFa-
CANT pcDdJrC-LIc system OF having DIaHcA Oi-aAl-
cations of the parent company in different Saer, with
policy hOdcTs in such States only the presiding oilrer
S SI nTe6 9t .S PIT Of Soers Of co ro
the different Statos-the member from Pennsylvania
would for instance, Gt once aenand in{estsaa9H he
NJ tb,n in Ills own ,atc. and rice rcrsg
Thus, there may be number OF associated organizations
not only aeuateI BY spirit ot emualion as 10 wien
snail transact the most business, but which the safest
business and at the lowest ra.c OF expenditure.
or the two Insurance companies whose business has
been a,ey suspended by order OF the state slpernen
dent II perhaps 10 say that they ought never TO
been established In she OF the Great We tern,
the Company WAS organized II Is sald ch,y 10 create
places ana positions LOT certain persons MOo OF NhOD.
IL is asserted, knew lite Of the business There l. no
allegation, indeed tAcre IS no appearance u anything
ike fraud but glance at tAe accounts At Orce shows
ucOmpctcucy ana OU-cnosS OF infringement, The Com
pany was the 3O.h OF December 1865, with
stock captalOi SIS OG sl0o00 Of which deposited
| II
ness accounts show OF Liabilities cXcid-
the provision OF S5O5,5O0 required 10 chsuIc policies
still IN iOTce. Among tc arts thee is ~ item Of 49,
7C0 due from agents. For small company this was
larger than ought % Dc allowed to remain In TIE
hands OF agents There ~ also item OF SC0OOo ad-
yanced 10 agents on account Of their commissions, an
ucm which the state superintendent refused 10 allow to
rank a cash asset During the year the compduy's
losses amounted to 80 per cent O It's entire tpa This
may, OF course, have been pure mlsiorthlc, bus Il Is
generally attributed To previous incOmpctcncy in select
The CNllD OI It's aLlirS SHOWS TIE WISDOM or
amended sections Of the Insurance Act OF 1855 which
not only empowers Dut imposes Guty Oh tue super
mtendont OF tho Insurance Department the following
WLeleye. he shall good reason SUI he CORRECTNESS Of say
The ala a,lg
al condition, Ton
tho a .se n ote{ az s,5e doing 30 a b. i .as
Ills STATE Inc ne section also "a 5; Wherever a apyar ~
sad superintendent from such examination that & e Of ny A
company be outstanding De- shall
appy Supr. Court requiring
cause VII che Dane~ Of sven Copan sl}a nj Ue~ose al %
respective PARTIES aud IN csse sha ariar TO h satisfaction s
sioresaii said shah elects rtl-
ing the securities deposited the hands Of the SAID Superintendent
In compliance with the law. the Attorney General. on
the strength OF the SpcrntendCnVs report of ms
maton iilO the affairs OF the Company asked Of
order from the supreme Court for the DISCO u the
Company No attempt made 10 deny the Insolvency
or the Company, ana order accordingly granted
But the case the second Of these nsolvcnt eompa-
Mes the Farmers and Mechanics Life Insurance Com
pauy, Is y far more serious matter it presents
stance not 80 much Of lncOmpetcncy OF extravaganza
Teckessness and absolute fraud THIS Company shegt
existence extended only - months from the date Of
its organization, and yet lis show SlSl
Of liabilities Including $4,000 capital, tie assets
In addition to the whole lie and policy business tis
Company also adopted the form or insurance known
the cooperative system, the false basis ~ which has been
described above the utmost Ieckcssucss eNpcBdi-
turc appears have characterized the business OF tbs
Company from tho commencement IN The - months OF
its less than S6sO0-uOre than laf the cap
itai-waS expended in ddycrtiSu printing, and Station
cry alone Ot the frauds by which Tie Company endeay
Orcd 10 conceal their extravaganza rom the authorities