The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1872-12-19
77-l77'7----
INSURANCE..
INSURANCE..
TEE LESSON OF THE MUTUAL LIFE DISCUS
SION.

MIR. EDIT0R--I have read the whole debate, from
proposition to conclusion, and the sum OF the
whole matter seems to be this:-That majority Of
the Mutual Companies cannot afford to reduce
their rates OF insurance while the one having the
largest and longest experience believes that 1t
do SO with safety and propriety. Indeed the reso
luton of its board disposng OF the matter for the
present declares that, while the past experience
Of the company demonstrates its ability to carry
out the plan OF reduced premiums, cit directs, in
compliance with the request OF the other compa-
MES referred to, tnat the proposed reduction of
rates be not carried into effect until the further
action OF the board" There is, then, delay only.
not total change of purpose. The Mutual Lie
may yet and not long hence, trust, reduce
their IA ties and furnish insurance at It's worth.
Dividends are well enough In theory, but In prac-
ticc their ever changing character and the mis-
representations and disappointments incidental
to and springing out OF them or the fail
ure OF them make the matter of dividends the dis
grace Of many aud the bane OF most mutual COM
panies The proposition OF the Mutual Life OF New
York vas really a bow at the dividend delusion.
It was an approximation to pure and simple and
legitimate life insurance to the low rates of stock
companies. 1t was step In the right direction. II
was a substantial endorsement OF the premiums
OF such companies. The rates 1t intended to adopt
for itself were ony-say half a dozen per cent in
excess OF stock rates. and these stock rates. backed
by the enormous capital OF such companies as the
National Life Insurance Company OF the United
States OF America, have been previously unquali-
fedy endorsed by Mr.. Elizur Wright and Mr..
Sheppard Romans as sound and sufficient; and
here quote as appropriate from the report OF the
gentleman and Mr.. d. P. Facker, to the various
mutual companies which requested the Mutual Life
to reconsider its purposes.
Mutual rates are designedly and certainly ought
to be igher than the probable cost. The excess
forms the capital. And, again The reserves OF the
old policies are, In effect, to be used as capital
stock to bear the expenses OF getting new bust
] ness at stock rates, which must considerably ex-
coed the margins OF the new premiums. The public
| Will be glad to welcome the day of universally
| cheap insurance. The stock companies Of the
country are the only ones which can now give in
surance at Its cost. The National Life Insurance
Company OF the United States OF America char
tered by Congress mot the National OF New York,
one Of the mutual companies Directing to the pro-
posed reducton) has capital OF ST. 100000 owned
by such as Jay Cooke, +. A. Rollins, John Sher
man, Clarence H. Clark and william G. Moorchead.
The largest capital which has ever been pledged
to any pure life company in America to protect
rates approved by tho best actuarial talent Of the
country of this company, its rates. plans, &C.. the
special lesson OF the last two weeks discussion Is
highly commendat0ry.
A CY.HOLDER IN A MUTUAL COMPANY.
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