New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1878-08-01

Occupatlon-as in the case of clergy
men or engineers. Some associations thus
formed, and sustained by the mutual cO0pera-
ton of members in their occupation, or by the
special selection of lives and characters which
religious or benevolent organizations may Sc
cure, have been very useful and successful.
But the number of failures among companies
of the mutual benefit" class has been such
as to justify extreme distrust of the system
upon which they are based.
Wherever it is attempted to substitute ir-
regular assessments for fixed premiums, or to
provide voluntary yearly insurance instead of
contract insurance for a long term of years or
for life, in either case there is reason for dis
trust The management of to-day may be
eminently able and honorable, but no one can
be sure that such managers will continue
to live and to retain control, and any
system of irregular assessments, however care
fully guarded, offers almost unlimited OppOr-
tunities for fraud, if the company falls INTO
the hands of men who can be tempted, or
have become entangled in private affairs. On
the other hand, if each member is free to
abandon the association at pleasure, paying each
year only what a years insurance actually
costs, it is inevitable that the younger, more
vigorous and healthy are more likely to dis
continue paying than the aged, decrepit and
sickly. In such case the unsOund members
are liable to be left to bear all risks for each
other. But when each person insured contracts
to pay for life, or until fixed age, certain
sum yearly, the company contracting to pay
certain sum at death or the expiration
of the period, all who are insured
have the security that the healthy mem
bers cannot forfeit their contracts and drop
out without leaving behind them assets suf-
iiclent to compensate for their loss. If
company is wisely managed, it will offer
as just surrender value for policies,
not what each policy might be worth
If all members were equally healthy, but what
it really is worth in view of the original con-
tract, which is based upon the idea that the
many who remain healthy will make amply Sc
cure, by their regular payments, the few who
become sick within any brief period.
1t is very natural that the public confidence
in the established life companies, which have
withstOod all shocks and disasters, should
become greatly strengthened by the events
of the past five years. No intelligent man
has doubted that life insurance upon the con-
tract system, if hOnorably and wisely managed,
was absolutely safe. The difficulty was that
some companies were known to be
not honorably or wisely managed, and there
was a doubt which of them could be trusted.
But they have been tested and more severely
than companies or persons in any other branch
of business. The great disasters of recent
years, forcing many to cease payments, the
enormous shrinkage in the value of assets, and
the losses by the failure of many corporations
whose securities were once deemed good,
have been followed by most severe mvestiga-
tons Of the condition of companies. 1t is
natural and right that those which have borne
such tests should receive in full measure that
public confidence which can only be given
when there Is better basis for it than the assur-
ances and promises of interested persons Until
comparatively new companies, and companies
based upon different systems or methods, have
been subjected to equally severe tests by ex-
perience and investigation, it is not possible
that they should command as much of public
confidence.